Employers Aid Workers in Financial Distress

It's official. On Monday the National Bureau of Economic Research confirmed that the U.S. has been in a recession since December 2007. This news came as no surprise to many consumers. They have been feeling the impact of escalating unemployment rates and increasing food and other costs for quite some time. Many people have been struggling to afford basic needs like food, child care, housing, and transportation and this financial stress often spills over into the workplace. Employers are taking notice of the stress and are providing some help.

Last week in an article published by the Wall Street Journal titled "Crisis Help via Work," they reported that more and more workers are feeling stress from job pressures and from the turmoil in the financial markets. To help alleviate this stress, some employers are offering free financial counseling. In the article, the WSJ cited an EAP program that provides assistance with budgeting and debt reduction by certified financial planners, accountants, and attorneys through confidential telephone counseling sessions. This sounds like a win-win solution to help workers deal with stress and to help employers gain more productive employees, but there are some challenges in engaging more employers to adopt this service.

The New America Foundation recently commissioned research conducted by Dr. Lewis Mandell of the University of Washington to determine the motivations, methods, and barriers for employers to provide non-retirement financial education in the workplace, particularly to low- and middle-income workers. The study explores the reasons why employers decided to offer financial education and it identifies the perceived internal benefits and external benefits of providing financial education in the workplace. The study also documents the types of financial education offered by employers, as well as information about when and where the education was offered. Additionally, the report provides information about the role of third-party, out-of-house providers, such as EAPs, and presents mini-case studies illustrating how employers across the country utilize various parties to deliver this important benefit. The full report is available for download here.

For a brief video overview of the paper by Karen Murrell, please click here.
And please stay tuned for the posting of a more in-depth conversation about the research findings with Dr. Lewis Mandell.