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
Chicago
New York
San Francisco
Washington, D.C.
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