Why Businesses Should Consider Employee Financial Wellness Programs


This article was written for our sponsor, Consumer Education Services Inc.

Unless you are equipped with a laser-like focus, your working time is unlikely to be 100% productive. You will arrive, have a cup of coffee or a snack in the kitchen, check your emails and maybe get distracted by a news headline or sales promotion etc.

It is natural to disconnect from time to time at the workplace. Indeed, according to researchers from University of california, employees typically only get about three minutes of focus before their workflow is interrupted, whether by outside influence or their own actions.

While some degree of distraction is to be expected, when the stress from your personal life begins to creep into your work life, you may find yourself wasting more time than usual. Most often, this stress stems from financial difficulties.

According to Reuters, employees with financial problems report losing around 12.4 days of work due to presenteeism – in other words, being physically at work but mentally focused on something else.

When caught in a difficult financial situation, a common short-term solution for money problems is a payday loan, especially when it has a poor credit rating, which makes it difficult to obtain credit terms. favorable. Unfortunately, although these types of loans work quickly, they are akin to putting a bandage on a deep wound: it will stop the bleeding, but it will not solve the problem.

In fact, many people who take out payday loans end up paying a lot more than they took out due to sky-high interest rates. added.

“Small loans can be expensive and even predatory for those most at risk in our economic system. We’re here to help North Carolina residents qualify for a loan that will ease their pain and not cause more trouble down the road, ”said Scott Wolford, program director at Carolina Community Impact. “We offer simple and flexible guidelines and allow individuals to qualify for up to $ 1,000 without a credit check and usually the money is in their account two days later.”

CCI is a non-profit organization that provides access to credit building, asset building and financial services in partnership with education and loan products.

“For employees who don’t have access to a credit card or can’t get to the bank and get a loan, the Community Lending Center is an incredible alternative option,” Wolford concluded.

The Triangle NC Community Lending Center is CCI’s small dollar loan program for employees in need of immediate financial assistance. There are no credit requirements or complicated hoops to go through to be eligible – a person simply needs to be eligible for benefits with a business that has registered with their local community lending center.

After the online application is complete, which usually takes 10 minutes, their human resources department will need to verify the job and salary information. Once the loan is approved, applicants can expect the money to be deposited into their account within two business days.

“One of our main advantages is that, thanks to our technology, we are able to help quickly. In times of financial stress, employees are less productive if they can work, ”explained Wolford. “Employers want to enroll in this program because it takes the stress out of it. We are not asking the employer to be responsible for the loan. We are only asking that they verify a person’s employment and income and deduct the payment as a payroll deduction.

Essentially, employees can access a small loan to deal with an emergency quickly. When it comes to loan repayment, an individual’s employer simply makes a monthly payroll deduction of a predetermined amount until the full loan is repaid. For example, for a loan of $ 1,000 at the typical interest rate of 15.9%, a person can expect to pay around $ 90 per month.

In addition to providing a loan, the CLC also offers eligible residents of North Carolina the opportunity to participate in individual financial counseling through Consumer Education Services Inc., a local non-profit credit counseling agency. . In this way, not only can individuals invest money for their loans and bills, but they are also able to learn how to avoid financial difficulties in the future.

“The idea is that CESI accompanies them throughout the loan repayment so that at the end of the day they have a feasible financial plan and budget and that they are in control of their financial life,” explained Mike Croxson, CEO of CESI. . “Once they repay the loan, they will have freed up cash that they can use to save and meet their financial goals.”

Wolford added: “We have found that when customers first call we have to help them with the urgency they are facing. Once the immediate need is met, clients can take the time to learn how to improve their overall finances and ensure that they never find themselves in such a situation again.

For employers, enrolling in the CLC program costs them nothing but offers significant benefits. In addition to improving employee morale and presenteeism, companies that enroll in the loan program can also host free lunch and learn classes that cover a variety of financial literacy topics.

“For employers who are truly committed to meeting the needs of their employees, it’s important that they recognize that the financial health of their employees is as important in many cases as their physical health,” said Croxson. “This is a free benefit that employers can offer that helps improve the financial well-being of their employees and provides convenient financial solutions in the event of a financial emergency. “

The CLC has a default rate of less than 5 percent.

This article was written for our sponsor, Consumer Education Services Inc.

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