Boosting Confidence

Workers throughout the U.S. are struggling with managing their finances, and that stress could spill over onto their company’s bottom line.

According to a recent survey by Mercer, employers could lose up to $250 billion in wages for employees’ time spent distracted by money issues. The firm finds that employees on average spend about 150 work hours worrying about finances each year. On average, they spend about 13 hours per month doing so, with 16% reporting they spend over 20 hours. These situations could have dramatic effects on employee engagement, absenteeism, productivity and even health care costs.

In response, more and more employers are turning to financial wellness programs. But while it is a hot topic in the employee benefits world, financial wellness is often difficult to define. Mercer notes that financial wellness is not just about having a good grip on financial literacy and that programs focusing on this concept alone may fail to deliver. Instead, the firm suggests that programs need to improve what it calls “financial courage,” or the confidence to engage financial issues.

Mercer says certain tools can help employees approach these challenges in a simple way—i.e., one requiring just a basic level of financial literacy. The firm points to options such as budgeting tools and coaching, credit management assistance, student loan refinancing programs and access to non-retirement savings vehicles.

In addition, it also developed the Mercer Financial Wellness Index. To measure an employee’s financial wellness, the index focuses on criteria including level of comfort in meeting various financial obligations and level of financial stress.