HR professionals play a critical role in ensuring the well-being and financial stability of their employees. In 2023, Americans have nearly 1 trillion dollars in credit card debt. This record high debt can have a significant impact on an employee’s financial stability, stress levels, and overall quality of life.
Why Employee Debt Matters
Employee debt can have significant negative impacts on your organization’s productivity. It can also affect your employee retention and turnover rate. Employees may be less productive or miss work due to financial stress or stress-related health issues. They may even be more likely to engage in unethical behavior to alleviate their financial struggles. In addition, employees struggling with debt may be more likely to leave your organization to search for higher-paying jobs, resulting in high turnover costs. In fact, financially stressed employees are twice as likely to look for another job, according to PwC.
What Can HR Professionals Do to Help?
As an HR professional, there are several things you can do to help your employees manage their debt and improve their financial wellness.
Financial Education
The first step to helping your employees pay down their existing debt is to provide them with education resources so they are better equipped to face and understand their financial situation. General education is a great place to start. It’s important to offer resources from independent and unbiased sources who only have your employees’ best interests in mind.
Money Management Tools
Every employee’s financial situation is different, and many employees have multiple sources of debt. This fragmentation can make it difficult for your employees to fully understand their debt, and come up with a plan to pay it off. You can provide your employees with hands-on tools to help them understand their full financial picture. These tools are especially useful because they relate general education to an employee’s unique situation. They can also nudge employees to take action on their debt repayment journey.
Financial Coaching
Sometimes, your employees need an expert opinion. Offering financial coaching can be game changing for employees struggling with their finances. Coaches aren’t just financial experts. Coaches can also serve as a support system and/or accountability buddy. Your employees can receive customized support to help them create a specific plan to pay down their debt. Coaches can advise employees on debt repayment strategies, refinancing options, and can identify ways to reduce expenses in order to pay off debt faster. Coaches help employees make that final step from knowing to doing.
Create a Supportive Workplace culture
Finally, creating a supportive workplace culture is critical for helping employees manage their debt. This can include offering flexible schedules, providing mental health resources, and offering paid time off for financial and personal reasons. A supportive workplace culture can help employees feel more secure and reduce their financial stress. Additionally, bringing custom debt education such as live webinars and fireside chats to employee resource groups can help to foster a supportive workplace culture and break down the taboo around money-talk.
Employee debt is a significant issue that can have extensive repercussions for your business. Offering a comprehensive financial wellness benefit to your employees can greatly reduce turnover and absenteeism, and can improve employees overall health, wellness, and productivity. That’s why BrightDime offers financial education, money management tools, live events, and unlimited financial coaching. Want to learn more about BrightDime’s financial wellness employee benefit or strategize on how to further build financial wellness into your company’s culture? Contact learn-more@brightdime.com
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