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3 Steps That Get Your Employees Out of Debt & Benefit Your Business
Any financial stress your employees feel has a direct impact on your company’s wellbeing. According to a recent study by consulting firm, Mercer, worries about financial security take up an average 13 hours each month of employees’ time—when they could be focusing on the job. The estimated loss to US businesses in attendance and productivity is around $250 billion a year.
Clearly, if you haven’t already implemented a workplace employee benefits solution, now’s the time to do so. You can begin to help your employees manage their debt and, in turn, boost productivity and promote loyalty to your company by first helping them to understand their debt landscape, educate them about how to manage debt, then provide an employee benefits solution that will work to solve their financial concerns.
Step 1—Understanding an Employee’s Financial ‘Landscape’
The first step in helping your employees recover from debt is encouraging them to understand their financial state. They can do this by getting familiar with their personal credit record.
Every US citizen has the right to order a free credit report from each of the three major credit bureaus each year—TransUnion, Experian, and Equifax. This can be done through AnnualCreditReport.com. A credit report can also be purchased directly from any of the credit bureaus at any time. Equifax and Experian offer 3-bureau reports that include all three major credit reports in a single document.
Using your internal communications channels, you can guide your employees to credit bureau websites and help them to follow instructions on each website. Once employees are in possession of their credit records, they will know exactly how well or badly they are managing their debt. An important point to remember—employee credit reports are private documents and you can only help your employees to understand them if they give you their permission.
Step 2—Learning How To Manage Debt
Once an employee has the documents, they will need to know how to review their credit report. Importantly, all information on the report, such as names, addresses, Social Security Number, accounts, and loans should be accurate. If any information is out of date or unfamiliar, employees should immediately contact the business that holds their account or the credit bureau that issued the report.
An increasingly important part of helping your employees to management their debt is giving them helpful information about how to protect themselves from identity theft. The credit report is a good place to start. Any suspicious activity or accounts will be immediately recognizable as a possible sign of identity theft. Other steps to be taken against this type of theft are:
- Shred documents that include personal information before throwing them into the trash.
- Password-protect all online devices, and use up-to-date anti-virus software.
- Make it a rule to never share account numbers and personal information over the phone or by email. Criminals use phishing phone calls or emails posing as banks, retail businesses or even coworkers.
- Keep a check on credit card accounts and bank statements for any suspicious activity.
- Don’t forget to clear personal information before selling, donating or discarding computers and devices.
A credit record will allow your employees to see what debt they owe and how well they’re managing their repayments. Debt too often spirals out of control when it’s a case of a little debt here and a little debt there. It’s a sobering exercise to see how debt can accumulate into an unmanageable amount, which is the main source of debt anxiety. In the same way, employees with smaller debts can feel on top of their financial situation after adding the overall amount owed and coming up with a payment plan to get out from under debt.
Now it’s time to provide employees with online tools to help them budget optimally in a way that allows them to come out on their salary while paying off debt. Financial literacy programs or tools in the form of webinars, podcasts, blogs, and guest speakers, is an investment in your employees long term financial wellbeing.
Step 3–Providing The Best Employee Benefits Solution
Not every financial event can be planned for. According to national data, nearly 1 in 3 Americans has no savings to handle a financial emergency, and the last thing you want is for them to approach unscrupulous payday lenders or begin to dip into their 401K plan.
Get on board with a trusted employee loan solutions partner who can provide you and your employees with expert service and support every step of the way, helping your employees to focus on their work and increase their productivity. Your employees will also feel that you care about them and reward you with their loyalty. There’s also the added bonus of attracting the best talent to your company by standing out from the crowd with impressive employee benefits solutions.
Contact TrueConnect to find out how we can partner with you to provide safe, affordable financial support and hope to employees in need of a helping hand. We are a technology-driven solution, enabling you to offer your employees the right solution to get them through tough financial times with the convenience of paycheck deductions. It is both free to employers to offer and simple to manage.