By Nick Fountain:
In 2017, 78% of full-time workers were recorded as living paycheck to paycheck. The paycheck to paycheck lifestyle is common for today’s working-class citizen, especially if they are fresh out of college or are in a career transition. And it’s not just lower salaried or hourly workers either. CNBC reported even those making $100,000 or more struggle to pay their bills, with 59% of those in that salary range in the red and 1 in 10 usually or always living paycheck to paycheck.
Being in a bind with your wallet can weigh down anyone, physically, mentally and professionally. As an employer, employee morale and engagement could be in danger as workers face the stress. SHRM conducted research on this correlation. They found 76% of employers witnessed an increase in stress. 60% reported an inability to focus and 34% noticed employees playing hooky or being late for work.Have you seen a decline in #engagement and enthusiasm at work? The answer could be one of financial matters. Let @NickRBM explain how you can help as the boss! Click To Tweet
So what can you as an employer do to help out your employees dig themselves out of that ditch?
Channel Your Inner Dave Ramsey
To quote the budget guru, Dave Ramsey: “We buy things we don’t need with money we don’t have to impress people we don’t like.” That was published in his book The Total Money Makeover: A Proven Plan for Financial Fitness. This quote is one of the most relatable I’ve ever read.
If you have not heard of him, Dave Ramsey is a renowned financial expert that has published numerous books that help people manage their debt and address other money topics. Ramsey has countless resources like classes, podcasts, episodes and books that can help anyone address financial concerns.Educate your #employees on how to be fiscally responsible and they will be eternally grateful. Learn more now! Click To Tweet
Consider purchasing the “Financial Wellness for Employees” class. Then invite interested employees to go over the materials during a company-sponsored luncheon. It will be a great chance to reinvigorate morale while helping those employees who are in the red. This will not only reflect in happier employees. Your reputation and brand will increase because you are taking steps to help your workers professionally and personally.
Student Loan Assistance
In the past few years, companies have built loan payback assistance programs for employees who hold student loans. For example, a student loan of $26,000 with 4% interest would take roughly 10 years to pay off. With an employer contributing $100 per month, that time is cut down by seven years and would save the employee roughly $10,000. While nothing changes in terms of amount paid by the debtee, it does help them avoid the cost of interest.
The only downfall to this method is that money paid to your employee’s debt is viewed as taxable income. These are different from tuition reimbursements, which are tax-free below a certain amount. Consider the options and what would be most beneficial for your organization. You should also understand that with programs like these, employees feel a greater sense of loyalty. Loyalty leads to increasing retention all while boosting employer branding and reputation with their peers.
Lean On Me, When You’re Not Strong
Sometimes circumstances for employees are unique. Aging parents, medical challenges and unforeseen catastrophes can throw even the most fiscally-minded person into an endless pit of debt. Providing counseling and one-on-one mentoring could be the resource this type of employee needs more than anything.
Launching your own financial mentoring program allows workers to discuss their personal obstacles with finances and create a strategy that answers those issues. If your company can tap into the talents of your internal financial department, you can build a high-touch program that helps both the worker who is in debt while developing leadership skills in the employee conducting the meetings.
Handling debt correctly is terrifying because one false move can lead you into further money troubles. Take it from me or anyone dealing with this issue, living paycheck to paycheck is not easy, fun, exciting, sexy or exhilarating. You can’t make it all disappear as an employer. But you sure can ease the pressure and alleviate the stress of dealing with it on top of your employees’ workload.