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This blog is provided by Ashley Johnson, a business blogger, as a companion to the interview with Jack Modzelewski and his interview on Innovating Leadership, Co-creating Our Future titled Leadership, Communication and Credibility in a High-Stakes World that aired on April 14, 2020.
Your responsibilities to your staff go beyond simply signing their paychecks, granting their leave requests, and assigning work. It is also your duty to look after their financial health, especially in light of recent developments that have pushed America into an economic crisis. In these times, 15% or more of any given workforce is struggling financially. Part of this is due to flat-lining income levels that, when adjusted for inflation, are a mere $50,000 annually per household. In other words, there is a good chance that many of your employees are living paycheck-to-paycheck, and are possibly deep in debt. The question for today’s business leaders is what should they do about this?
Financial hardship equals poor performance
The above scenarios can lead to financial stress, which can be very debilitating for employees. In a Marcus feature on the link between physical and financial health, money coach Elisabeth Donati explains how money-related stress is almost as bad as health stress as it is directly tied to a person’s drive to survive. Failure to attain this drive, in turn, worsens stress, and can result in some serious health problems like depression, anxiety, sleep disturbance, and psychosomatic symptoms such as headache, fatigue, and even pain. In other words, financial stress can take not only a mental and emotional toll on your staff, but also a physical one that can affect how they work.
Indeed, a Reuters article on financial health by journalist Beth Pinsker describes money stress as being “as bad for workplace productivity as back pain.” In a 2018 survey of 1,600 working adults, some 15% admitted to missing work due to health problems caused and exacerbated by financial stress. Around 40%, on the other hand, admitted to being distracted due to thinking about their finances, leading to a reduction in workplace productivity. The situation today is likely the same as that of 2 years ago, if not worse, given the unsettling events of 2020 and their adverse impact on the American economy.
The physical, mental, and emotional toll of financial hardship underscores why you, as a leader, need to look after your employees’ financial health. Put simply, doing so is good for business, as financially healthy staff will be more productive, especially since they won’t be distracted by thinking about their financial issues. Crucially, making sure your employees have sound finances will help them avoid the health-related pitfalls of financial stress, and will cut down on missed work days due to health concerns involving money anxiety.
Ensuring employees’ financial health
So, the question is: How can business leaders ensure the financial wellbeing of their employees? Amway chief HR Shantanu Das recommends three financial wellness strategies you can implement, beginning with giving competitive compensation, which should ideally be above market standards. Staff must be compensated based on merit, so as to encourage a high standard of work and to keep them motivated. You can also offer a variety of financial assistance programs, like emergency loans, educational sponsorships, and even car payment subsidies. Make sure that you also give everyone all the benefits — 401(K), medical insurance, etc. — they are entitled to, and more if possible.
Finally, it would be a good idea to connect your team with financial planners, who can give them expert advice on how to attain financial independence. These can range from one-on-one meetings to group seminars on everything from retirement savings to cultivating healthy money habits. While a business cannot be directly responsible for how an employee spends their money, having these services in place shows them that you are prepared to go beyond the usual parameters of most companies. Such advice, along with your financial programs and support, will help ensure your staff’s financial wellbeing, and keep them productive and happy at work in the process.
Your job as a leader isn’t just about running the business and counting the numbers. It is all about stepping up and being someone who your employees can count on for a wide range of issues. Marie Miguel notes in ‘Why Mental Health Awareness is Important for Leadership’ that good leaders lead, and that means taking care of your people so you can motivate them to be productive and efficient. In this context, taking care of your employees means keeping them happy, which you can do by looking after their financial health as well as their physical and mental health. This is what it means to create a healthy work culture that will inspire those who work for you and encourage future top talent to seek out your company. We hope the above points will help you have a better understanding of how and why you should look after your employees’ financial health.
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ABOUT THE AUTHOR:
Ashley Johnson is a business blogger who specializes in following the latest leadership trends. She hopes her articles will inspire new and veteran business leaders alike, and help them establish a better company culture. In her free time she loves to hike with her family.
Photo by: Alexander Mils via Unsplash