Responding to Workers' Financial Crises: Employers and EAPS Can Help Workers Address the Symptoms and Underlying Causes of Economic Stress by Adopting a "Financial Triage" Approach That Incorporates a Money Coach

Article excerpt

With more and more people losing their homes to foreclosure and filing for bankruptcy each day, the current financial crisis is creating a ripple effect that is affecting all facets of society, If the economy continues to weaken, as many analysts believe it will, the combined number of foreclosure and bankruptcy filings may exceed 3.5 million by the end of 2008. This means roughly one m every 50 families will be profoundly affected, which is staggering to consider.

The "silent epidemic" of money problems is costing businesses $15,000 per year per affected employee. Facing financial uncertainty, burdened with debt, and besieged by bill collectors, employees are bringing their financial worries to work at great cost to their productivity. Without proper attention to and management of these issues, corporate performance and profitability will suffer.

THE IMPACT OF FINANCIAL STRESS

Coping with money issues, both practically and psychologically, is a major life straggle for millions of people even in good financial times. Individuals often have unconscious beliefs related to money that govern their choices, patterns, and day-to-day management of money issues.

Most of the money beliefs that people maintain and practice are deeply entrenched and have been passed down from one family generation to the next. Some of them conflict with others; many are not apparent to us. The list of such beliefs includes the following:

* Money is power.

* Money doesn't buy happiness.

* I'm not good at math, so I'm not good with money

* It's not nice to talk about money

* The more money you have, the bigger the problems you have.

* My mother and father were bad with money, so I'm bad with money.

* I don't deserve money,

Money remains a mostly taboo subject for many people and can trigger an array of emotions, such as shame, fear, guilt, and anxiety, Consequently, people often develop avoidance strategies as a means of coping with their feelings about money until they "hit bottom" financially and are forced to confront their emotions.

Another factor that makes it difficult to address money issues is a lack of training and education about money, both at home and at school. Much of what we learn about money management is through osmosis from friends and family and is, more often than not, inherently flawed.

Employers and EA professionals need to be aware of these underlying beliefs and emotions and recognize what causes them. More importantly, they need to understand that money is a core survival issue. When people are fearful and anxious about money and their personal finances, they frequently are too overwhelmed and stressed to be focused and mentally "present" at work. Prolonged financial pressures can lead to increased problems with spouses and higher incidences of alcohol and drug abuse, depression, despair, and suicide.

According to the Center for Financial Social Work, money issues are the greatest stressor in peoples' lives and the leading cause of divorce. They are a major source of anxiety and insomnia, a primary reason for abuse and violence, and a trigger for alcohol and drug abuse. They frequently are accompanied by feelings of hopelessness, shame, isolation, and vulnerability and can cause people to become distracted, angry, and irritable.

Over time, people who are burdened by debt become less reliable, patient, and productive. As stressors increase, workers are more prone to making mistakes, causing or becoming involved in accidents, lying, and arguing. Their state of mind can increase their susceptibility to steal, take bribes, or misappropriate funds.

Employers who believe their employees' financial issues are not their problem should consider these findings from various studies of how financial stress affects individuals:

* Productivity may decrease (by as much as 20 hours per month per employee (1))

* Accidents may increase (60 percent to 80 percent of on-the-job accidents are related to stress (2. …