Workers with Financial Stress are Less Productive

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Workers with Financial Stress are Less Productive, May 5, 2000. Consumer Credit Counseling Service of Kansas City

Kansas City, MO - May 5, 2000 - Research recently conducted by Virginia Tech confirms that financially-stressed workers are less productive. Tech researchers teamed with the National Institute of Personal Finance Employee Education (NIPFEE) and Consumer Credit Counseling Service (CCCS) from Roanoke, VA to survey a sample national population of employees.

The surveys contained questions regarding current financial status, participation in retirement plans, mental, physical, and emotional health, and job performance within the last year. The research found that:

Job productivity was higher among workers who considered themselves financially stable.
Up to 50% reported spending an average of 24 hours per month of work time dealing with money matters.
25% felt continually plagued by financial trouble and found it difficult to pay bills.
Most were insecure about their personal finances for retirement.
Nearly 30% desired financial education on budgeting, tax planning, and getting out of debt.
75% would attend an employer-sponsored financial check-up if made available.

" An employer would be foolhardy to not recognize that workers with money problems can be identified, helped, and turned into profit centers," says E. Thomas Garman, Fellow and Professor, Center for Organizational and Technological Advancement, Virginia Tech, Blacksburg, VA. "Instead, these employees can act like the dead weight of an anchor, pulling down a ship."

Consumer Credit Counseling Service (CCCS) of Greater Kansas City and Mid-Missouri has found the research to be accurate. According to Nancy Nauser, President of Consumer Credit Counseling Service of Kansas City and Mid-Missouri, "Workers with money problems are neither participating in employer-sponsored retirement plans nor saving enough for retirement on their own."

"A retirement plan is of little value if no one utilizes it; the employer doesn't receive the desired tax benefit and the employees will not be in a financial position to retire early (or even on time), " stated Nauser.

Employees may become super-annuated (meaning they are older, demand higher salaries, and are typically less productive than they once were). Super-annuated employees can be extremely costly to an employer.

Nauser states that retirement plan participation levels are low for two basic reasons:

Most employees feel that they don't have the extra money to put towards their retirement.
Many workers don't fully understand the company benefits plan or the basics of investing.

Both of these problems can be addressed through personal financial education in the work place. If employees learn how to budget, grasp the basics of investing, and fully understand their benefits package, it becomes easy for them to find the extra money that can be redirected towards retirement planning. CCCS offers business productivity solutions to area companies through no-solicitation corporate seminars and brown bag luncheons that address several financial topics. "In the Kansas City and Columbia areas, we have had very positive feedback on the presentations from both employers and employees," stated Nauser.

Further data collection is underway. By adding personal financial education to their current benefits package, employers could expect to minimize employee theft, reduce workforce turnover, prevent wage garnishments, increase plan participation levels, satisfy ERISA 404(c) requirements, attract quality employees, boost company loyalty, improve productivity, reduce tax exposure, and ultimately save money.

"Employees with financial stresses can impact the employer's bottom-line tremendously," says Garman of Virginia Tech, "Financial education is an employee benefit that employers must offer to maximize profits and remain competitive."

Consumer Credit Counseling Service is a not-for-profit agency with the mission to develop and implement financial solutions to promote self-sufficient individuals, families, neighborhoods, and communities. Services include budget development and analysis, the debt management plan, financial educational services, pre-purchase homebuyers education plan and analysis, and Credit Report Review. CCCS works in partnership with El Centro in KCHEC our homebuyer education program.

Most of the funding for CCCS comes from voluntary contributions, and partnerships from creditors who participate in the debt management plans, foundations, and corporations within the communities CCCS serves.

Headquartered in Kansas City, Missouri, CCCS has offices serving both Kansas and Missouri. Offices are located in Midtown, Kansas City, Northland, St. Joseph, Mazuma Credit Union, Sedalia, Columbia, Jefferson City, Ft. Leonardwood, Rolla, and Whiteman Air Force Base, and Overland Park, Kansas. To make an appointment with a certified CCCS counselor, call (816) 753-0535 or (800) 736-0535 24 hours a day. For more information visit CCCS Web site at www.cccs-kc.org or email questions to info@cccs-kc.org.