On-the-Job Money Woes Impact Bottom Line

On-the-Job Money Woes Impact Bottom Line

OPINION by Jack Thompson

A study was recently reported on ABC News in which Americans scored an average of 42 percent , a failing grade , on a 14-question test of basic knowledge of personal finances.






The fact is too many Americans are financially illiterate. They don’t budget. They don’t save. They spend too much and make bad financial decisions. A survey conducted by the Los Angeles Times in 2001 found that 27 percent of respondents characterized their personal finances as “shaky,” and 40 percent reported difficulty paying installment loans, car payments and insurance premiums.






The bad news for employers is that these poor financial planners are on their payrolls. They come to work each day, but are often burdened with money concerns that impact their job performance. That’s when it becomes the employers’ problem, too.






Consider The Impact






A National Institute for Health study found that 30 percent of all absenteeism and 66 percent of all terminations are related to employees’ personal problems. Research by Virginia Tech’s National Institute for Personal Finance Employee Education found that approximately 15 percent of workers in the United States experience so much stress from their personal finance situation that their productivity is reduced.






There is strong evidence that workers struggling with money problems make more errors, provide poor customer service, make fewer sales, cause more accidents, experience greater health problems, have higher turnover, take more sick days, claim more workers’ compensation, and have higher health care costs. On average, these workers waste up to 24 on-the-job hours each month. Additionally, employees with financial problems are more likely to develop substance abuse or theft problems.






All these factors can have a serious impact on a company’s bottom line. Employers must address these factors or pay a very high price.






Turning It Around






According to the study, approximately two-thirds of workers with either sporadic or chronic personal financial problems could improve their financial situation and quality of life within 12 months by attending basic financial education classes at their workplace. In actual dollars, the first-year return on financial education that improves a worker’s personal financial wellness is more than $400 per employee per year. The study reports that for the nation’s 18 million clerical workers, the savings would amount to $440 million per year.






Financial wellness programs for employees are a simple and cost-effective way for organizations to have a significant impact on their bottom line. Individuals who are in control of their finances make better employees , they are happier and healthier, they perform better and are more loyal to their employers. Therefore, budget training for employees is just good business.






Thompson is president and chief executive officer of Consumer Credit Counseling Service of San Diego