Mental health and financial health typically go hand in hand. That’s something employee benefits managers were well aware of even before the Great Recession. For years, studies have shown a link between stress over finances and an increase in mental health problems, including depression, anxiety, and substance abuse. And on the flipside of the coin, people with mental illnesses are more likely to have financial problems.
Now the COVID-19 pandemic adds new evidence to support this important realization. An overwhelming 84 percent of Americans reported feeling financial stress in their lives because of the COVID-19 pandemic, according to a survey released in October 2020 by the National Endowment for Financial Education® (NEFE®). And that specific stress was in addition to being in the already fraught situation of trying to cope with the other difficulties of living through a pandemic.
For many, COVID-19 has also added the extra burden of burnout. After months of Zoom meetings, working from home, teaching the kids, and hardly leaving the house, your workers are likely to be exhausted. Two-thirds of workers are experiencing burnout, according to a recent study by Mental Health America, and 40 percent of those say it’s because of the pandemic.
SoFi’s own data bears out how much strain the pandemic has caused for workers. In a May 2020 SoFi survey, 44 percent of the more than 1,000 consumers we surveyed said they were experiencing mental health issues and/or emotional stress due to COVID-19 and 30 percent said they’re experiencing money-related stress. Financial stress and mental health problems can lead to increased absenteeism and low productivity among your workers, especially during these trying times. Offering support to your workforce can help them, and that, in turn, may be reflected in improved productivity and retention.
That’s why it may make sense to help employees combat financial issues and mental health problems at the same time. Even before the pandemic, many employers were exploring ways that financial well-being benefits and mental health benefits could work together to build the support and offer the solutions employees need to weather financial and mental stress.
Here are some lessons from those efforts that might benefit you and your organization.
Recognize How Financial Well-Being Programs Can Support Mental Health in the Workplace
Financial planning, budgeting tools, debt counseling, and financial education services have become increasingly popular employer offerings in recent years. These tools can help employees become financially stable so that they can move on to long-term savings and goals. In addition, gaining control over day-to-day financial challenges can help reduce the stress and anxiety associated with financial instability.
Now may be a particularly good time to emphasize the connection between financial and mental health wellness to your workforce. According to SoFi data from summer 2020, almost 60 percent of 2,050] employees and job seekers we surveyed want more financial well-being benefits as a result of COVID-19. What’s more, 48 percent said they would likely stay with an employer that offers financial well-being benefits.
Offer a Choice of Flexible Financial-Contribution Programs
Personalized benefits that are relevant to individuals’ situations can be especially helpful in reducing the financial stress employees are feeling right now. The pandemic has highlighted the need for short-term, goal-oriented savings. Depending on an employee’s personal situation, payroll deduction emergency savings accounts, student loan repayment programs, and/or debt management tools may be tailor-made tools that can help them handle the financial stressors that may be contributing to depression, anxiety, and other mental illness.
This is a good time to take inventory and see what solutions might be missing from your financial well-being benefits. Questions to consider include:
• Have you set up an automated emergency savings program for employees?
• And if you have, are you sure your employees know it exists and how to participate?
• Do you have a 401(k) matching program for employees paying off student loans?
• Are your education and financial planning efforts aimed at all employees, not just those focused on long-term savings?
Help Employees Keep an Eye on Long-Range Goals, Too
Much of the workforce is still paying off student loans or working on eliminating their current debt. But more than half (55 percent) of Americans say that not having enough saved is causing them the most financial stress, while just 30 percent say that paying off debt is their biggest worry, according to the NEFE survey.
Despite the demand for short-term saving solutions, you may also want to help employees balance short-term and long-term goals. Even for younger employees, you don’t want to take the focus completely off retirement and college savings benefits. And for employees who are closer to retirement, maintaining savings is important, too. Helping everyone in your workforce, regardless of where they are, maintain a balance between short-term and long-range goals can be an important step to developing their overall financial well-being and lowering their stress.
Human resource leaders, mental health professionals, and economists all agree that the collective fatigue and stress caused by COVID-19 could have far-reaching consequences for your workforce. Employees who are suffering from stress may not have the creativity and focus your company needs to emerge from the pandemic as strong as ever.
Given what we know about the connections between mental health and financial well-being, combining your mental health and financial well-being benefits to create customized packages accessible and meaningful to all employees can help ensure your workforce is ready for the challenges ahead.
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