Financial Wellness: EAP’s Role, Challenge, and Opportunity | EAPA-SA

Employers are coming to realise that there is an important correlation between physical, emotional and financial well-being.  These facets all work together to create more productive and engaged employees.  With this in mind, financial wellness is an aspect of employee wellness that is fast becoming a vital element within many organisations’ employee assistance programmes (EAPs).  In addition to boosting productivity, financial wellness initiatives are seen as a valuable draw-card in the mix of benefits that attracts top talent – these can help organisations recruit and retain high performers across all generations. 1

Even if an organisation’s employees have well developed financial literacy skills this may not translate into their taking the correct action to create their own financial security – it does not necessarily translate into employees’ financial wellness.  It has become clear that employers have an intrinsic role to play in creating financial savvy in their workers.

The effect of a lack of financial wellness in employees can be felt three ways:

  1. Loss of productivity while at work

Loss of concentration, inability to focus, anxiety, tension, stress and a decline in mental health are all adverse factors that can affect an employee with financial problems.  In addition to struggling to meet work output and targets, financial problems that cause sleep deprivation will result in a drop off in the ability to think critically and solve problems.

  1. Absenteeism

Financial stress, and its impact on mental health, has seen a rise in absenteeism in South Africa; and then there is the problem of presenteeism. When employees have debt which is causing them to worry, they battle to focus on work. They might be present at work but they are not productive.

  1. An increase in theft and fraud

At the same time that employers are faced with reduced productivity due to employee financial problems, they are also faced with the possibility of increased workplace fraud and theft of company property. Need is one reason individuals take to stealing from their employers and personal financial pressure can degrade an employee’s standards. Workers who steal could well begin thinking that they are going to pay back what they have taken, but over time the chances are that the amount becomes too large to repay.2

Promoting the delivery of financial wellness programmes

An employee assistance programme plays an important role in offering employees access to a confidential service that allows them to talk about their personal situation and helps to find a solution. Clearly explaining and widely promoting the EAP service offered is essential if employees are to access the support available to address their financial problems. For many employees affected by personal finance problems there is a stigma associated with poorly managed personal finances.  This is a significant factor in preventing them from seeking help.

Key elements of promoting a corporate financial wellness programme include:  

Effectively promoting generalised and personal help

The investment that employers make in EAPs can only pay off if employees know how to contact the service and have a basic understanding of how it can help. A partnership between the employer and the EAP is beneficial to ensure staff financial wellness programmes are targeted effectively. For example, a generalised financial education and awareness programme could be linked to changes happening in the business or a corporate change in remuneration policy.  Or personalised help could be linked to a particular development in an employee’s personal life, such as maternity leave or pre-retirement planning.

Overcoming stigma

Employers need to plan, along with their EAP, promotion of the assistance available in which confidentiality is assured.  This way, when employees do experience financial stress, they will be motivated and confident to contact their helpline and ask for support before things get too much.

The confidential nature of individual assistance from an Employee Assistance Practitioner should be made very clear.  Individuals experiencing financial problems can immediately start to get help without fear that their job will be affected and so reduce the stress they are experiencing – though it may take a longer to resolve their underlying financial issues which are the cause.  In addition to psychological assistance for stress and other conditions caused by financial worries, employees can swiftly be put in touch with professionals who are equipped and experienced to assist in putting right the underlying financial issues.

For those employees with significant personal finance issues, such as major debt, the focus and advice may need to be about how to deal with bailiffs or discussing the implications of declaring bankruptcy versus setting up an individual voluntary arrangement. Due to the perceived stigma employees will typically contact an EAP when their problem has reached an advanced stage – where it is probably that earlier involvement could have significantly reduced distress for the employee and lessened the negative impact on the organisation.3

Financial wellness programmes can benefit an organisation’s bottom line

Employers are in an ideal position to bring real, positive change in their employees’ lives – to reap a reward from offering financial wellness programmes that educate their employees and shift them toward better financial habits. These benefits go a long way towards alleviating financial stress and setting employees up for a brighter financial future.  Importantly, financial wellness programmes have a measurable impact on an organisation’s bottom line, particularly in improving productivity.4