Easing the Burden of Financial Stress in the Workplace

By Elizabeth Agnvall Jun 2, 2008
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In Ap​ril 2008, Maritz Inc made a deal with their local Sam’s Club to give workers at the sales and marketing services company’s headquarters in Fenton, Mo., a $10 discount on membership. Con McGrath, vice president for people and organizational development said two-thirds of the company’s 3,300 employees are based in Fenton, and those workers are feeling the pinch of the high gas prices.

“Most of these folks, virtually all, are getting to work by car. Mass transit is not an option. Most everybody is being impacted by the higher gas prices. It’s hurting people in the pocketbook.” McGrath said gas prices are generally a dime a gallon cheaper at Sam’s Club, and the retailer has discounted prices on food, which helps combat rising grocery bills.

McGrath said the company has seen a slight increase in employees that call the company’s employee assistance plan (EAP) for financial assistance such as debt counseling services. He says his company hasn’t seen a rise in absenteeism or reduced productivity, but that may be attributable in part to recent changes in company policy.

McGrath said Maritz enhanced its 401(k) plan a year ago to increase the amount it matches, changed the benefits provider and increased the quality and accessibility of financial education. The company expanded commuter benefits and offers an on-site wellness program with exercise classes to help combat stress.

Maritz is one of an increasing number of employers reaching out to help workers handle financial stress brought on by higher gas and food prices and mortgage challenges. Experts familiar with financial stress on employees say too much financial burden can lead to increased absenteeism, sick leave and even alcohol and drug abuse. The spillover costs of too much financial stress in a household can range from excessive time spent on personal phone calls at work to serious psychological problems requiring counseling.

Recent research has found that as gas prices climb, employee productivity can plummet. According to a 2008 survey of 800 full-time employees with an average round trip commute of 30 miles a day, rising gas prices have caused:

  • 52 percent to reconsider taking vacations or other recreational activities.
  • 42 percent to cut back on debt-reduction payments, such as credit card payments.
  • 45 percent “to fall behind financially.”
  • 39 percent to agree that “Gas prices have decreased my standard of living.”
  • About a third of respondents to say they would quit their job for a commute nearer to home.
  • Nearly 30 percent to consider the consequences of going without basics including food, clothing and medicine.

Wayne A. Hochwarter, the Jim Moran Professor of Management at Florida State University’s College of Business, who conducted the research, said the employees he surveyed were so concerned with the price of gas that they were less attentive on the job, less excited about going to work and less passionate and conscientious about their workload. He found little difference in results among people of different occupations, gender and work tenure.

“What we’re finding is that when people are struggling, it’s extended beyond the gas prices to just everything, including food and electricity. It gets in their brains and they spend far more time thinking [at work] about how to make ends meet,” Hochwarter said.

Signs of Financial Stress

Edward Charlesworth, co-author of Mind Over Money and Stress Management: A Comprehensive Guide to Wellness and the director of Willowbrook Psychological Associates in Houston, said the number one stressor in the United States is money. He said a change in personality or routine is often one of the first signs that some kind of stress—financial or otherwise—is spilling into the workplace.

For example, a person who is typically outgoing might become more withdrawn. An employee might have a drop in performance and an increase in absenteeism. He said he’s seen an increase in substance abuse, including alcoholism, brought on by financial pressure.

Oliver Williams, administrative director with the Chicago-based EAP firm Bensinger, DuPont and Associates, said calls around the country regarding financial issues are hovering around 18 percent, which is about average. He said the company has seen an increase in employees calling with issues surrounding a mortgage problem.

Williams, who has worked as an EAP professional for 25 years, says cyclical changes in the economy over the years often result in anxiety at work. Employees might undergo anxiety, depression, substance abuse and even domestic violence. Managers might also notice low productivity, inability to focus and difficult relations with co-workers.

“That’s why we want to take the time to talk with the person to see how the financial situation is impacting their lives,” Williams said.

Williams said employees who are struggling to make ends meet financially might take more than the usual amount of personal calls at work or even have wage assignments [garnishment] from debtors.

“A lot of times, HR has to have a bigger eye on work performance issues as they come up. If the performance problem is related to a person’s financial condition, that’s one indicator that an employee might need help.”

Marina London, a spokesperson for the Employee Assistance Professionals Association (EAPA), said employees undergoing financial stress may be irritable, less tolerant of assignments and pressures and not focused on work. Employees might also ask for advances on their salaries or extra shifts. Although most want concrete help rather than emotional support, she said counseling is extremely valuable if financial woes at home are spilling over into the workplace.

“I don’t want to discount the importance of having concurrent supportive counseling,” said London, who worked as an EAP executive for large employee assistance programs before joining EAPA. “The concrete financial services are important. It’s also important to have an objective ear where you can talk about how stressed you are about what’s going on.”

More Employers Help

Employers don’t typically get involved in employee’s financial woes, Hochwarter added, but he’s seeing a shift in that attitude. Since he posted his research he has fielded several calls from companies asking how they can help their employees.

Companies are responding with a variety of methods aimed at reducing the effects of financial stress. The Society for Human Resource Management (SHRM) surveyed its members on this issue recently and found that gas-cost related assistance rose dramatically over last year, with 42 percent of employers raising mileage reimbursement to the IRS cap. The survey found 12 percent of companies help organize carpools, 14 percent offer public transportation discounts and 14 percent reward employee performance with a gas card.

“What’s important is for organizations to reach out and find a way to demonstrate some level of concern, some level of care, empathy and understanding,” Hochwarter said.

Long-Term Effects

Some of the changes employers and employees are making because of gas prices and the mortgage crisis might actually benefit society in the long run, according to Charlesworth.

“Our American addictions include money and spending,” Charlesworth said. “We’ve worked ourselves into a corner here, but I think we can heighten our awareness and consciousness.”

He said counseling can help change dysfunctional habits and teach people to stop tying their self-esteem to having a Montblanc pen or the latest SUV.

“I think in some ways this is going to be beneficial to start to value ecologically responsible behavior,” Charlesworth said. “If you raise the consciousness and start to put the emphasis back to where it should be, then we get back to finding out what really makes us happy anyway.”

Elizabeth Agnvall is a Washington, D.C.-based freelance writer.

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