Findings from the 2011 Aflac WorkForces Report highlighted the discrepancy between how companies and their workers view benefits communications:

• 85% of employers believe their HR departments are effective at benefits communication
• 27% of employees say their HR communications are not very/not at all effective
• 39% say the efforts are somewhat effective

And yet everyone agrees there is much needed improvement:

• 8% of employees say they are fully engaged in making benefits decisions
• 63% of companies say their workers need to be more engaged

What’s at stake? Not surprisingly, workers who are unprepared and under-protected against an accident or illness are highly vulnerable to the financial implications of an unexpected health event.

As more and more organizations realize, the health and financial wellness of an employee has a direct effect on the company’s productivity and retention levels.

• Companies are paying three times as much as last year in health premiums
• Most employers think their benefits communication is effective but few employees feel well informed
• Under-educated employees are making expensive decisions

Surely there are more options for proactive organizations than just waiting for the US Congress to work together to uncover ways to reduce both the country’s budget deficit and soaring health care costs. At the recent 24th Annual Benefits Forum and Expo in Dallas, two industry experts highlighted some key ways to reverse these trends.

Repeat after me: Improve Benefits Communication
Benefits Communication expert, Jennifer Benz, spoke about the need to simplify benefits for employees. According to her, benefits managers have an opportunity to solve one of the country’s biggest problems just by improving benefits communication.

Put benefits information online, outside the firewall. Establish a year-round dialog with employees through social media. Use public health services and other existing resources to promote benefits.

Balance Health and Financial Wellness
Ron Leopold, Vice President and National Medical Director of MetLife U.S. Business and industry thought leader, advises organizations to focus on helping employees find physical and fiscal success.

“There is a yin-yang relationship between health and financial,” Leopold said. “People who are financially secure are in a better position to maintain better health and people who are not financially secure face greater obstacles in terms of getting healthy and getting health care coverage.”

So there you have it. Improve benefits communications and invest in all-around wellness. Problem solved! If only getting Congress to work together was so easy…

So, the natural question is why a credit score of all things would be used to evaluate a prospective employee?

One likely reason might be that employers worry that a poor credit score indicates a lack of responsibility that could ultimately translate into poor performance.

Credit score indicative of a poor performer?

But there may be another important reason…or, at least there should be.  The impact of poor employee financial health on corporate productivity has been well publicized in the wake of a troubled U.S. economy.  Many employers may feel that employees with poor credit are likely to spend significant time at work worrying about or dealing with their personal financial issues.  Or, worse yet, miss work entirely.

Whether or not a FICO score is a suitable barometer for a candidate’s future success, these results reveal that in the minds of many employers, there is an important link between control over personal finances and job performance.

But what about existing employees?

Employers might make more productive use of this link by introducing broad financial wellness education to current employees, rather than simply focusing on the credit histories of a few new hires – especially considering that credit reports are often explicable or simply inaccurate.

Many states are pushing to make the investigation of credit histories by prospective employers illegal. Employers will need to find a new tactic to ensure the financial health of their workforce.  A comprehensive financial wellness initiative can be a much more effective means towards this desired goal.

“Over the last two years, HR interest in effective approaches for helping employees understand their workplace benefits and solve their personal financial issues has grown considerably,” said John Wolff, Vice President, Business Development.  “This newsletter will serve as a platform for sharing what we’ve learned in a decade of experience helping employees in these areas.”

Sign-up for GuideSpark’s monthly newsletter here:
Financial Wellness and Benefits Communications newsletter

Poor employee financial health is having a negative impact on organizational objectives and productivity. Four out of five employees in financial distress spend time at work dealing with such financial issues – resulting in a 12 to 20 hour drain on productivity – each month.

“The Need for Financial Wellness” webcast is scheduled for Tuesday, December 8 at 11:00 a.m. PST. John Wolff, vice president of business development, will discuss the issues of employee financial health, and ways employers can address this growing problem.

Registration for the complementary webcast is at https://www1.gotomeeting.com/register/438311969.

Forward-thinking companies that implement financial wellness initiatives can expect a return on investment of over 3:1, according to recent studies.

In its new white paper, “The Need for Financial Wellness,” experts from GuideSpark (formerly ThriveOn) discuss the advantages available to companies that take ownership of the financial health and wellness of their employees.

On January 27th, 1927, two years before the US economy fell off a cliff, inventor Philo T. Farnsworth applied for a patent that is now considered the official birth date of the television. Because this medium was still in its infancy in 1929, radio and newspapers were the only tools with the ability to reach the masses. But as we know, all of these mediums are only good for moving information one way.

Consider October of 1938, when the voice of actor Orson Welles was heard over the radio as he described a devastating Martian attack on the earth in the now infamous “War of the Worlds” broadcast. Over 1 million people, 20% of the listening audience believed this was actually occurring and literally panicked, some even contemplated suicide.

Probably not likely to happen in today’s www.world . If Orson tried to throw that same spiel our way, instantly, we could access vast resources and communities to verify that the Martians never left Mars and assure us that we will live to fight another day. Likewise, doesn’t the Web put us in a much better position to battle our way through this current economic invasion? Yes and no.

According to comScore Marketer, searches for several terms related to the economic downturn showed dramatic gains during the past year. Among the most notable increases were searches relating to the deteriorating job market, including searches using the term “unemployment” (up 206 percent to 8.2 million searches) and “unemployment benefits” (up 247 percent to 748,000 searches). Meanwhile, terms relating to personal asset situations, including “mortgage” (up 72 percent to 7.8 million searches), “bankruptcy” (up 156 percent to 2.6 million searches), and “foreclosure” (up 67 percent to 1.4 million searches) also grew strongly.

So I decided to throw myself on this pile and did a search on the word, “mortgage” Up popped a short list of 172 million entries. So yes it was helpful that I could access topical information so quickly, but on the other hand, without some way to filter this stuff, am I really that much further ahead? I don’t know about you, but I am not energized by 172 million options, quite the opposite, like those in 1938 who ran from the imagined Martian attack, I start to run for cover.

But all is not lost…this is an opportunity in all this. The key is to be equipped with some simple, personal financial frameworks that help us quickly sift through information and facilitate sensible decision making in good times and bad. I will cover some ways to get this done in my next entry.

It looks like their overall framework for economic recovery encompasses two strategies. First, remove these black hole assets from institutional balance sheets to facilitate systemic solvency, focus and confidence. And secondly, refine the regulatory environment to support prudent lending practices going forward.

While no one’s sure if these measures will ultimately work…I do buy into the framework. It’s both reactive…dealing head on with the current crisis and proactive…creating an environment where it is less likely to happen again.
At a more personal level, there are certainly indicators that economic toxicity is trickling into our workplaces.

Early this year, the Society for Human Resource Management (SHRM), surveyed its members and confirmed the effects of economic stress.  In the previous 12 months, members had seen a 26 percent increase in employees having their wages garnished by collection agencies; a 39 percent increase in requests for 401 (k) plan loans; a 20 percent increase in requests for pay advances; and a 14 percent jump in employees reporting having lost their homes.

This is obviously not just somebody else’s problem. I recently asked a Fortune 1000 SVP of Human Resources if she believed the money worries were affecting the productivity of her workforce. Her response was swift and direct, “absolutely… I have no doubt that we are being negatively impacted.” And just as swiftly she has recently led her company to install a cutting edge financial wellness program. With this kind of win-win leadership, it’s no wonder that they are consistently named on all those “Best Places to Work” lists.

Well, maybe it’s time for a sanity check. Have you ever talked with someone who lived through the Great Depression? If you ever get a chance to do so, it’s enlightening. My dad, who was 7 years old in 1929 was the son of a very prosperous retailer, Walter Wolff , whose department store occupied nearly an entire city block in downtown St. Louis. My dad clearly remembers housekeepers, nannies and drivers…in other words, a very privileged life. And from his recollection, it was all gone in a day.

It’s interesting that once a commercial pilot qualifies for his or her license that, from that point forward, about 80% of their training time is spent on simulating emergencies and only 20% on normal flying activities. Maybe it’s time that instead of blindly jumping back into the market on the first and maybe fleeting bit of good news, that we consider the lessons learned over the past 14 months and compose a more “all weather” plan. The airplane we call the stock market may be capable transportation for very long distances but, as we have found, for shorter journeys, not so much.

For whatever transgressions or chain of events we now have a scenario where the government is moving into an unprecedented roll of intervention. The Wall Streeter’s and major US businesses are being treated as naughty school children who were given too many toys, misused them and grew exceedingly selfish. Now the well-resourced head master who, by the way, has never worked in the real world, is coming on scene to set things straight and make sure that these naughty children are transformed into model citizens of the business community and, of course, run model businesses. I’m struggling with how this is going to work.

With so many economic concoctions that have never been tried before along with the unfathomable quantities of dollars being injected into the system, it seems that consumers are responding by running for cover. Some of this is actually good. US household debt, which has been growing steadily since the Federal Reserve began tracking it in 1952, declined for the first time in the third quarter of 2008. In the same quarter, U.S. consumer spending growth declined for the first time in 17 years.

What’s happening here is that we are looking at life differently from a financial perspective. Often, when conducting a corporate financial education course, I encourage the class to categorize their spending habits in very simple ways, rather than working for hours on a detailed budget, which most find less sustainable than a diet. I suggest that, for two months, they note each expenditure with either an “E” for essential or “NE” for non essential. These respective stacks are typically quite revealing and may lead to discovering more about what I call your “Financial Persona”.

For example…

- How you define the word, “essential” when it comes to your spending habits? This may change over time if it hasn’t already.

- Shifting through the non-essential stack, which of those items add significantly to the enjoyment of life and which do not.

- Do you see any opportunities for changing or reprioritizing the contents of the respective stacks?

To put this exercise in context, given what we don’t know about what may be in our economic future, you may want to strongly consider building up a cash account that is equivalent to 6-8 times the sum of the “E” stack. That is, if you find it “essential” to get a good night’s sleep.