What do you know about your employees and their money?
Probably just this: you pay them, they do their job, end of story.
And therein is the first and biggest myth about the subject: that what happens after the payroll check is cut is of no consequence to employers.
Don't be so sure. Money is the source of significant hate/love among employees (mostly they hate how much stress it causes). That's especially true this time of year when they're spending freely for all those swans-a-swimming and geese. And it can elevate or tank your company in more than just the obvious ways. Those who aren't paying attention to the consequences of employees' financial health are likely to be unhappily surprised. Here are a list of six of the biggest myths about workforce finances, the truths behind the myths, and why you should care.
Myth #1: Money flows one way... the boss pays, employees earn.
Fact: Wrong. In any organization, money flows two ways. There's the money you pay people to do their jobs, and the money they cost you (in lost productivity, errors, poor judgment, and worse) when things like stress cause them to not do their jobs well.
Myth #2: Still... it's their money problem... not mine.
Fact: We already know that stress weighs down performances. And one of the top stresses that gets in the way of performance? You guessed it -- money. Today, many people are feeling the effects of the great recession, making money issues even weightier. So bottom line: their money problems are the organization's money problems.
Myth #3: Solving money problems is simple: don't spend more than you make.
Fact: Money is not about quantity. It's a management problem; not knowing where it's going, spending aimlessly, and constantly worrying about -- without knowing -- where you stand. That's the real power of money -- what it can do to you when you feel like you don't have control of it.
Myth #4: But our budget is finite, meaning we can't give everybody raises, so there's nothing we can do anyway.
Fact: It's not about how much money they have (see myth #3). It's about how they manage it. And you can -- and should -- do something about that. People who are buying a house but have never managed a mortgage -- that's a huge source of stress. Somebody who has no idea how to pay down student loans? There's another huge source of stress. Providing employees with tools to better manage their money offers stability. By answering those questions, you're not just dealing with money . . . you're removing huge impediments to performance. And companies that are paying attention are reaping the rewards. At Bright Horizons, after our first employee well-being survey told us that people ranked themselves lowest and most stressed in the area of money management, we responded with supports. The results have been measurable.
Myth #5: We're already helping them save for retirement -- that's the best thing we can do.
Fact: Check your 401k participation -- I'm willing to bet it's not as high as you think. And why is that? It's because people aren't thinking about retirement. They're too busy pedaling just to keep up. We found this out in our own employee survey. We thought fiscal fitness meant retirement readiness. But in our survey, people told us they couldn't even think about putting money in those 401ks because they were too worried about how to keep up with their expenses right now. So we completely reoriented all of our financial solutions. Today, we offer "right now" resources including a la carte assistance through our Well-Being Help Center and experts in things like budgeting and college loan repayment in our month-long Save Smart Series. Not only have we gotten positive feedback on those "right now" resources, we've also seen 401k participation jump to higher rates than ever before. People tell us that's because they now feel able to manage their expenses today so they see the opportunity to save for tomorrow. A more solid financial platform does that.
Myth #6: Our people are financially fine so there's no point.
Fact: If this is true (a big "if"), look at it from another angle. The fact that they're managing their jobs and their assets probably means they're great employees. And don't you want to keep them? Research shows that organized Generation Y-ers who are actually able to think about retirement are looking for advice to help them plan it. Do everyone a favor and provide it.
All of this should answer the "why should you care?" question. Money is a year-round problem -- not just a holiday concern. And the simple domino effect is that money problems cause stress. And we have solid research showing that employees falter with more stress, and work better with less.
And working better is one excellent reason for employers to care.