CUs Underselling Themselves To Co.'s? Study Says 'Yes'

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Credit unions are in a unique position to work with (sponsors) to reduce employee financial stress and increase workplace performance.

MADISON, Wis.-Credit unions that pitch themselves to small businesses as cost-free benefits for employees are underselling themselves, according to a new study from the Filene Research Institute.

The new Filene monograph, "Financial Stress and Workplace Performance: Developing Employer-Credit Union Partnerships," suggests that that financial wellness programs can add hard dollars to employers' bottom lines. The study follows a Filene Research-sponsored colloquium that sought to improve the effectiveness of alliances between credit unions and their sponsoring organizations

Hard Dollars To The Bottom Line

One of the report's authors, credit counseling expert Dr. E. Thomas Garman, who is Distinguished Scholar and director of educational services at the InCharge Institute of America, states that financial wellness programs can add hard dollars to employers' bottom lines. "Study after study shows that a credit counseling and debt management program improves employee financial wellness and job productivity, including the quantity and quality of employee performance, and supervisor ratings of employees," wrote Garman. "Participants enjoy better health and fewer concerns about health problems. Employer job outcomes also improve, with decreased absenteeism and less work time used for personal financial matters."

Separate research has suggested that the dollar cost to an employer for an employee who is stressed about money matters averages $400 annually, primarily in work time wasted and absenteeism. Other studies show that 15% of employees are so stressed about money that it affects their productivity, and that percentage rises to 20%-30% for employers whose wages are below average.

According to the new Filene monograph, financial education leads to greater employee awareness of financial control, and therefore fewer financial worries, less stress, better health, and stable personal lives. Employee financial education also results in greater employee awareness and utilization of the company's benefit program, and its total compensation package. "The result is less absenteeism, fewer accidents, less job turnover, lower benefit costs, and higher profits," Garman offered. "Perhaps most important, employees who are financially secure are better able to learn, change, and grow with the company."

Also in the report, Dr. Flora Williams of the Purdue University School of Consumer and Family Sciences presents a model of a successful financial counseling program, including an inventory of the resources available to assist employees in need of help, assessment of the situation, education in sound money management practices, and intervention to implement a plan. "Programs that follow this model give clients a sense of control that helps to improve their quality of life as they learn to adapt to their financial environment," Filene stated, adding that a cost/benefit analysis of financial counseling programs reveals benefits and costs to each party involved in the program: the employee, the employer, and the credit union.

CUs In A Unique Position

"Credit unions are in a unique position to work with their sponsoring organizations to reduce employee financial stress and increase workplace performance," said Bob Hoel, Executive Director of the Filene Research Institute. "Credit unions possess the resources and expertise to address employee financial problems, thereby reducing financial stress and increasing on-the-job performance. Everybody wins when employee financial problems are solved. The employer maximizes return on its human resource investment. The employee grows in terms of confidence and self- worth. The credit union builds goodwill and fosters its reputation as a value-added partner to both employer and employee."

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