Magazine article Workforce

It's Their Debt, but It's Your Problem

Magazine article Workforce

It's Their Debt, but It's Your Problem

Article excerpt

Think Twice

Unless you've got dead batteries in all your radios, you know what the hot advertisements say these days: "Get Out of Debt." Advertisers are flooding the airwaves because they've crunched the numbers and found that there's a big market for their services. People are broke.

This problem dwarfs other money issues. Nearly four times as many employees call Financial Finesse, a financial-education provider, about debt as call about stock options. You hear a lot about college costs rising, but 40 times as many employees call about debt. Eight times more people call about debt than about mortgages. Personal debt is hotter than Winona Ryder's new clothes.

You're thinking: Why should I care? What am I supposed to do, be my employees' parent? Are their personal lives really my business?

You shouldn't be their parent. It shouldn't be your business. Unfortunately, personal debt is not a personal issue. It's a business issue.

Tom Garman is one of the leading experts on employee debt. For 25 years at Virginia Tech, he has studied how employees' money woes end up haunting the companies they work for.

"Financially distressed workers are like a poison poured on the floor of the workplace," Garman declares. "You can't see the poison, but it's there. It permeates more than just the employee who has a problem. It permeates the workforce. And most employers don't give a damn."

About a third of employees say that financial problems are affecting their job performance, he notes. He has found this to be true with clerical employees in Virginia, chemical workers in Louisiana, and white-collar employees in three midwestern states. These employees are more stressed, less productive, and absent more often than others. They make more personal calls about money, they send more personal faxes, and they talk about the issue longer with coworkers. Their physical health is worse. They waste about 20 hours of work time a month dealing with money problems, according to Garman's research on employees in 25 states.

Another study, by the Military Family Institute, shows that employee financial problems cost the US. Navy about $250 million annually (mainly because of the stress these problems bring).

Bill Pomeroy is president ofThe Edsa Group, a company in Baton Rouge that provides financial education to employees. He says that debt not only costs companies money, but specifically causes a strain on HR departments. …

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