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Employee performance can be heavily affected by the stress your staff feel over their personal finance constraints, a new survey has found.
According to a survey conducted by the Society of Human Resource Management, 70% of human resources professionals believe financial woes have a “large” or “some” impact on employee performance at their company. Of these, half reported employee stress and their ability to focus on work were the most negative side effects of this.
The survey also found 42% of HR leaders say medical expenses are employees’ biggest financial concern, while 41% said an “overall lack of monetary funds to cover personal expenses” affected their staff.
Just over a third of HR also believe employees have more financial worries now than they did during the early recession in late 2007.
“A potentially alarming finding was that 62% of HR professionals agreed or strong agreed that employees were more likely to request a defined contribution plan loan in the past 12 months compared with previous years, and 44% agreed or strongly agreed employees have been more likely to request a defined contribution savings plan hardship withdrawal,” the report stated.
“Employee continue to need financial education.”
Given the potential negative impact of financial challenges on employee performance, it would be smart for HR professionals to start thinking about how they might be able to help lessen the financial pressure on staff so they are able to better focus and achieve their targets.
“Most employers do not leverage their benefits programs as a retention/recruitment tool, however organisations that do leverage these benefits frequently cite their retirement savings and planning benefits as a means of keeping or attracting workers.”
According to the survey, 57% of companies currently provide financial education to their employees, and while 21% said they do not currently offer anything along these lines, they plan to do so over the next 12 months.
A key finding from the report is that of those who do offer financial support, 72% said it has been somewhat effective, but more than a quarter stated it has been rather ineffective, meaning there is definite room for improvement.
Knowing what kind of financial services to provide also depends on the demographics of your workforce. The survey found 77% of Baby Boomers place the highest importance around retirement planning, compared to Generation Y (14%). Younger generations care most about financial investment planning (31%) and general budgeting advice (24%).
Generation X employee similar care most about investment planning (44%), followed by retirement planning 20%).