How to talk to your employees about money

Employees want to talk about their financial struggles at work — it's up to employers to set the right tone so employees feel supported and not ashamed. 

Sixty percent of full-time employees are stressed about their finances, according to a recent survey conducted by PwC, while 49% find it difficult to meet household expenses on time each month and 28% often or always run out of money between paychecks. Acknowledging those challenges is the first step in helping employees out of a financial bind. 

"Inflation is real, groceries and daycares are more expensive, employees can't pay off their debt, they can't put tires on their car, and most of them are living paycheck to paycheck," says Petrina Thompson, head of HR and client services at Brightside, a financial care solution for employers. "They're struggling and it all impacts the employer in a very severe way." 

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When employees are stressed out about finances, engagement drops. Fifty-six percent of employees spend three hours or more per week at work dealing with or thinking about issues related to their personal finances, according to PwC's data, and only 53% of employees struggling financially feel energized at work, compared to 68% of those who aren't. As a result, employees who don't feel financially stable are twice as likely to be looking for a new job, with 73% admitting they would be attracted to another employer that cared more about their financial well-being. 

"If employees are worried about whether their lights are getting shut off, they can't focus on work," Thompson says. "It's not only impacting their ability to be present, physically and mentally; it also means employers are paying more due to high turnover. It's a vicious cycle." 

Overall, 67% feel comfortable asking for support and guidance around money issues, according to PwC, as just 33% find these conversations embarrassing. Organizations should take the opportunity to meet employees where they are and facilitate meaningful conversations that lead to change for all, Thompson says. 

Thompson recently spoke to EBN about her own experience dealing with money conversations as a people leader, mistakes to avoid and how employers can begin their own outreach efforts with employees. 

What's the biggest misstep organizations make when trying to talk to their employees about money?
Employers don't have super great data about the financial lives of their employees — they don't know anything about their credit score, whether they have any debt, if someone's a parent or a spouse that's contributing to the income of the household. As a result, they gravitate to the data they do have, which is 401(k) data and payroll data, but it's not enough because it's not complete. In addition, there are some indicators that I see employers ignore that can help them fill the gaps in their financial strategy. For example, when they see people leaving, how much of that attrition is because they have to move back home or to another state because they can't afford it? How many are leaving for a competitor that's offering 10 cents more an hour? If employees are taking hardship withdrawals or asking for payroll advances, those are bits of data that when you aggregate it all together could tell the story, but sometimes employers miss that. 

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Another pain point is that employers are only thinking long-term. They have 401(k) strategies and a retirement plan, but that doesn't help their employees buy diapers or help caregivers care for their aging parents. Employers are missing the real time needs of their employees that can be solved by offering short-term solutions. That's where the opportunity to provide that financial care to your employees really comes from. 

How much has stigma driven employees and employers' hesitation to talk about money at work?
Traditionally, employees believed that their professional life didn't need to include their professional challenges — and that included their finances. But you're getting some, if not most, of your income from your employer, so why is it that only raises, promotions and healthcare contributions have been deemed as appropriate conversations for work? Employers have the power to change the narrative.

It's a lot to ask for employees to be the first to break that trust barrier until it's comfortable for employers to ask about things like personal debt. So it's up to organizations to be intentional  and show that they're listening. If you really show that you care, you can start to build programs, communication strategies and solutions to meet employees where they're at, both emotionally and financially.

How can employers begin to touch on these subjects effectively?
We all have to make financial decisions every day. So the first thing that employers should do is listen, use some of that data and get to the bottom of what kind of solution they need. Do they struggle most with student loans? Paying off credit card debt? Daily budgeting to make ends meet? Once employees are comfortable enough to share, have a plan. You're going to get a lot of information that can help you figure out what you should be doing, so don't survey and do nothing. Change your existing programs if you need to or add new third-party support platforms that can alleviate the burden for HR. 

Overall, why is it important for employers to be more invested in their employees' financial conversations?
If you're going to sign up to employ people, then you need to care about what those people are going to need. Employees want to support that is personalized, they want to know that their employer has made things available and made choices that are relevant to them. People want to be part of a community and one of the biggest communities that they have is at work.