Should Your Employer Pay You to Get Financially Savvy?

You might think that someone who finds themselves heavily in debt should start trying to increase their earnings right away. However, going into debt isn’t necessarily an indicator of poor earnings. Many people face down debt despite having secured well-paying jobs that otherwise provide for the necessities (and sometimes the luxuries) of their chosen lifestyle. In this situation, the responsibilities of a high-powered job may actually make it harder to deal with debt reduction.

The pressures and stresses associated with work performance are only compounded when someone has a lingering debt that remains unpaid. As workers’ performance declines, it not only hurts their morale and potentially their earnings, but hurts their employers’ bottom line in turn. Based on this logic, some firms have begun offering incentives to employees who can provide evidence of participation in financial literacy programs, emergency fund development, and other core components around which financial health is built.

The Wall Street Journal recently published a report on this trend, noting:

“Among U.S. corporations with so-called financial-wellness programs, which are designed to teach employees basic money-management skills, 17% offered incentives for participation in 2016—the most recent year for which data is available—up from 10.7% in 2014. An additional 8% said they were considering such a move, according to the International Foundation of Employee Benefit Plans.”

Programs such as these were conceived in response to Deloitte survey data suggesting that the stress of money management outweighed on-the-job stress by up to 30 percent.

Currently, 17% of large companies in the United States offer financial-wellness programs that incorporate online tools while 42% offer one-on-one consultations, up from 9.2% and 35%, respectively, in 2015, according to investment-consulting firm Callan LLC.

Some programs are aimed at specific cohorts, such as recent graduates looking for meaningful, full-time work while often struggling with the repayment of their education costs. This lets firms get younger and more talented without risking burning out their brightest new employees. Others target the whole workforce, offering benefits and incentives to be used in the repayment of debts or the construction of emergency funds.

Would you feel safer about your job, your earnings, and your financial plan if your employer offered a similar set of programs or incentives? I know I would.

Leave a Reply

Your email address will not be published. Required fields are marked *