How Some Companies Are Paying Workers To Be Financially Responsible
It’s hard to do well at work when you’re stressed out, and one of the things most likely to stressyou out on any given day is money troubles. Perhaps this is why the Wall Street Journal reports that some companies are putting out financial incentives for their employees to make smart financial decisions.
Aetna Inc., Pitt Ohio LLC, SunTrust Banks Inc. and others are handing out cash and other inducements for employees who try to improve their financial situations. This includes reducing debt, funding emergency-savings accounts, and attending financial-education classes and meeting with advisers. These programs are called “financial wellness” programs, and 17% offered incentives for participation in 2016—the most recent year for which data is available—up from 10.7% in 2014. An additional 8% said they were considering such a move, according to the International Foundation of Employee Benefit Plans.
In the case of Pitt, a trucking company based out of Pittsburgh, they offered $56 to employees who contribute at least $19 a week for six months to an emergency-savings account without making withdrawals. Employees who maintain that for another six months qualify for a second $56 payment. Part of their motivation was a 2016 survey showing that drivers in financial stress were more likely to be distracted and cause accidents. There’s also a universal concern about employees and their retirement, with half of U.S. households being unable to hold their standard of living.
Executives have become aware that “employees are coming to work with a cloud hanging over their heads,” said Julie Stich, associate vice president at the International Foundation of Employee Benefit Plans, a nonprofit organization. “They are distracted by student loans and credit-card debt. The strain of living paycheck to paycheck is impacting productivity, stress, and well-being.”
“We know that stress is the No. 1 cause of health-related issues, and the No. 1 cause of stress is money,” said SunTrust CEO William Rogers Jr. “If we can attack financial stress, we can improve our employees’ physical well-being as well.”
Investment-consulting firm Callan LLC reports that 17% of large companies offer financial-wellness programs that incorporate online tools and 42% offer one-on-one consultations, up from 9.2% and 35%, respectively, in 2015. More than half of employers overall plan on taking steps to either create these programs or enhance the ones they have.
(By Ryan Velez, Financial Juneteenth)