According to a new CPPP and RAISE Texas report, too many Texas workers are living in financial insecurity, which leads to financial stress that can result in reduced productivity on the job. Other negative effects of financial insecurity include missed work and the potential for higher employer healthcare costs.
Workplace financial wellness programs – which help workers manage their finances through programs like employer-based lending programs and automatic savings opportunities – could help reduce the state’s high rate of financial insecurity.
A great place to implement financial wellness programs is the workplace. Research explores a variety of benefits for employers including increased employee productivity, increased participation in retirement programs, and less employee turnover overall.
There are several recommended ways that employers can provide financial empowerment opportunities to employees (from our report):
- Provide comprehensive new hire procedures for new employees that educate them on all employer benefits, including selecting a retirement plan.
- Promote split allocation of paychecks between checking and saving.
- Make available in-person financial advice and support.
- Conduct annual financial check-ups.
- Offer employer-sponsored small-dollar lending programs.
Approximately half of Texans have little or no savings, and nearly 60 percent of Texans have subprime credit scores. In addition, 67 percent of Texans fail a nationally assessed basic financial literacy quiz. By equipping workers with tools to manage their finances, workplace financial wellness programs can play an important role in opening up more doors for Texas workers to become more financially secure.
Read our full report on financial wellness programs here.
Read CPPP’s new report on retirement savings in Texas here.