By Anne Tergesen
A growing number of companies are paying employees to get their
financial lives in order, reflecting concern over the impact money
problems are having on employees' stress and productivity
levels.
Aetna Inc., Pitt Ohio LLC, SunTrust Banks Inc. and others are
handing out cash and other inducements to workers who take steps to
shore up their finances by reducing debt, funding emergency-savings
accounts, and attending financial-education classes and meetings
with advisers.
Among U.S. corporations with so-called financial-wellness
programs, which are designed to teach employees basic
money-management skills, 17% offered incentives for participation
in 2016 -- the most recent year for which data is available -- up
from 10.7% in 2014. An additional 8% said they were considering
such a move, according to the International Foundation of Employee
Benefit Plans.
Pitt Ohio, a Pittsburgh trucking company that employs 1,800
drivers, in 2016 began offering $56 to employees who contribute at
least $19 a week for six months to an emergency-savings account
without making withdrawals. Employees who maintain that for another
six months qualify for a second $56 payment.
Pitt Ohio executives grew alarmed about employees' finances
after researchers at the University of Pittsburgh discovered in a
2016 survey that drivers who reported financial stress are more
distracted and had more accidents, inflating the company's total by
about eight accidents a year.
In response, Pitt Ohio set a goal for every employee to have a
$1,000 rainy-day fund, said Chief Operating Officer Jim Fields, who
added that the company prides itself on its safety record.
Mr. Fields said half of eligible employees have participated in
the voluntary program, 92% of whom received the first $56 payment,
and most received the second payment as well. The company has spent
more than $100,000 on the incentives, he said.
Carrie Leana, a professor of organizations and management at
University of Pittsburgh, said participants reported significant
declines in their financial worry and increases in both their
physical and psychological health.
Fueling companies' focus on financial well-being is concern
about their employees' retirement funds. Half of U.S. households
are at risk of being unable to maintain their standard of living in
retirement, according to Boston College's Center for Retirement
Research.
Executives have become aware that "employees are coming to work
with a cloud hanging over their heads," said Julie Stich, associate
vice president at the International Foundation of Employee Benefit
Plans, a nonprofit organization. "They are distracted by student
loans and credit-card debt. The strain of living paycheck to
paycheck is impacting productivity, stress and well-being."
According to a survey published in 2015 by the American
Psychological Association, 72% of adults say they worry about
money. The Federal Reserve says 44% of adults lack the funds to
cover a $400 emergency.
To tackle this, companies are using incentives to boost
participation in financial-wellness programs. These typically
combine financial education with customized advice delivered by
mobile apps and human advisers. The goal: to teach employees basic
money-management skills and remind them -- via text messages,
emails or one-on-one meetings -- to stick to budgets, pay bills and
save more for everything from emergencies to retirement.
Currently, 17% of large companies offer financial-wellness
programs that incorporate online tools and 42% offer one-on-one
consultations, up from 9.2% and 35%, respectively, in 2015,
according to investment-consulting firm Callan LLC. More than half
of employers say they plan to take steps this year to create or
enhance these programs, says a recent survey from 401(k)
record-keeper Alight Solutions LLC.
Some employers are offering incentives to specific groups of
workers. Aetna recently began matching up to $2,000 a year of
student-loan repayments for full-time employees who graduated from
college after Dec. 1, 2013. (The health insurer caps the benefit at
$10,000 per employee.)
Other incentive programs target all employees. SunTrust Banks of
Atlanta gives employees $1,000 if they complete a
financial-education course on topics including budgeting and
reducing debt and make automatic contributions to emergency
savings. Employees can use the $1,000 to reduce debt or fund an
emergency, 401(k) or health-savings account.
More than 20,000 of the bank's current and past employees have
participated, SunTrust Banks said. The bank -- which has 24,000
employees -- has spent over $9 million on the incentives, it
said.
SunTrust Banks offers the program at cost to more than 80 other
companies, including Delta Air Lines Inc. and Home Depot Inc.
One-third of these companies offer financial incentives of their
own. More than 95% of participants at these companies now have
emergency-savings accounts, up from 68% at the time of enrollment,
with an average increase in the balance of $1,254, SunTrust Banks
said.
"We know that stress is the No. 1 cause of health-related
issues, and the No. 1 cause of stress is money," said SunTrust CEO
William Rogers Jr. "If we can attack financial stress, we can
improve our employees' physical well-being as well."
Write to Anne Tergesen at anne.tergesen@wsj.com
(END) Dow Jones Newswires
February 19, 2018 09:14 ET (14:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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