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Consumer Finance Knowledge Network Employer Engagement Tanya Ladha, Center for Financial Services Innovation March 3, 2016


Financial Health Financial health comes about when your daily systems help you build resilience and pursue opportunities.

Resilience

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Opportunity

Day-to-day


Consumer Challenges

30% of American households say they could only make ends meet for three months or less if they were to experience a sudden drop in income.

27% of Americans report having less than $1,000 saved for retirement.

43% of Americans describe themselves as struggling to pay bills and credit payments.

Source: Understanding and Improving Consumer Financial Health in America, CFSI, 2015

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Consumer Attitudes

25%

Worry all the time about being able to meet monthly living expenses

30%

Highly satisfied with present financial condition

45%

Confident I can meet long-term goals for financial security

Source: Understanding and Improving Consumer Financial Health in America, CFSI, 2015

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Financial Health In America

68 million people are un/der banked

Source: Understanding and Improving Consumer Financial Health in America, CFSI, 2015

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It’s Not Only About Income

more than 1/3 make more than $60,000/year

more than 1/3 make less than $60,000/year

Source: Understanding and Improving Consumer Financial Health in America, CFSI, 2015

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We Need to Improve the Financial Health of Employees

Financial health comes about when your daily systems help you build resilience and pursue opportunities.

Resilience

Opportunity

Day-to-day


Did you know? 1 in 4 American workers report that they are seriously financially distressed

4 in 5 American workers report some degree of financial stress Poor money management and insufficient emergency savings are the leading causes of financial stress


Financial stress is disruptive and costly. At least 25% of employees, regardless of their position or salary, are financially stressed and are costing businesses huge losses every year in the following ways:

Reduced Employee Productivity

Financially stressed employees spend 20 hours per month distracted by personal financial issues.

Workplace Accidents

60-80% of on-the-job accidents are stress related, often stemming from financial distractions.

Health and Welfare Issues

75-90% of all doctor visits are stress related and these problems are increasing employer costs.

Employee Turnover

40% of employee turnover is due to stress and some change jobs just to earn more short-term income .

HR Department Distractions

Financially stressed employees cause productivity issued to both themselves and others.

Source: HR Challenge: How to Improve Productivity and Reduce Healthcare Expenditure Through Workplace Personal Finance Education (2004); http://www.salmonthrust.com/RR026.pdf


Financial stress and is disruptive and costly. A 2010 Federal Reserve Study often cited by the National Financial Educators Council as well as other organizations place a spotlight on the problem financial stress causes in the workplace.

$5,000 per employee, per year

Employee financial stress causes a significant drop in productivity, costing employers $5,000 per year.

1.5x – 2.5x employee salary

The expense of replacing employees lost due to negative impacts of stress.

$1,200 in training costs

Independent of the cost of turnover, there are hard costs associated with training a new employee.

83% of employers surveyed observed employee productivity impacted by concerns about financial problems.

Sources: The Toll of Financial Stress in the Workplace (2013); http://www.kiplinger.com/article/business/T020-C000-S001-the-toll-of-financialstress-in-the-workplace.html; Wells Fargo Middle-class Retirement Study (2014); Asset Funders Network: The Power of Credit Building (2014); Federal Reserve: Report on the Economic Well-Being of U.S. Households in 2013.


Financial stress and is disruptive and costly. Annual Health-Related Cost to Employer (Disease Burden and Unhealthy Days)

$11,709

Suffering

$7,388

Struggling Thriving Source: GALLUP

$4,395 Controlling for demographic differences at baseline

Percentage of employees who have already used money in retirement plans for expenses other than retirement – shown by age


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@cfsinnovation #finhealth LinkedIn: Center for Financial Services Innovation

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