What to do when your employees are in financial difficulty

Only a handful of people can afford to not think about money in these hard economic times. To the rest of us, debt is a constant struggle. People are declared bankrupt or insolvent everyday, which only goes to show the seriousness of this matter. People are anxious and worry about their finances all the time, even at the workplace.

Why Should Employers Care?

Just as you would identify issues to do with abuse or mental and health problems in order to support your employees, you should do the same for their financial health. Employees with significant money worries are less likely to perform to the best of their abilities, plus, the increased levels of stress can put a toll on their overall health. Helping employees with their financial struggles is ethical, and it’s a win-win for both parties. That being said, here’s how management can ease up some of that stress:

Be Predictable With Paychecks

Reliable paychecks make it possible for your employees to plan ahead and meet their financial responsibilities on time. For instance, if an employee has a loan, paying it on time is quite crucial to avoid more debt in the form of penalties.

Offer a Financial Wellness Program

When a company offers ongoing workplace financial education, the results are long-lasting. Such a program should focus on behaviour modification rather than solving a particular crisis. Employees will learn how to manage their money, explore options to increase income, as well as the importance of budgeting, saving, and debt management.

If you are struggling with multiple debts, debt management can reduce your monthly payments. It’s never too early to start offering financial education at the workplace. Make it a policy for new employees to attend a financial literacy course.

Provide Workplace Support

There are several ways an employer can provide support to an employee who’s struggling financially. First, consider an Employee Assistance Program (EAP). These are programs that provide anonymous support by allowing employees to reach out for help without involving their employer. EAP can offer advice on finance, including budgeting, how to save, and how to manage debt.

The next step is to empower them. This includes offering financial advice, as we’ve discussed before, and paying them well among other things. It’s also important to provide access to rainy day funds. This should, however, focus on managing their crisis and not putting them in more debt. Employers should, therefore, partner with providers of zero-interest loans.

The major hindrance to improving financial health, especially in the workplace, is the fact that talking about money problems is still considered a taboo. Those who are struggling financially are often perceived as being bad at managing their finances. We don’t dispute the fact that poor money management can cause future money constraints, but there are several other reasons you may be stuck in debt. For this reason, employers need to able to identify employees in financial difficulty and offer them help.