Employers Helping Employees to Weather Tough Times

Almost daily there are news reports that the average gas price has set a new record. The continued increase in gas prices is taking its toll on many Americans and to manage the higher prices faced at the pump, people are searching for ways to cut other expenses. As individuals are looking for ways to cut expenses so they can afford increasing fuel costs, employers are also taking steps to help. Some employers are responding to the escalating gas prices by establishing perks to help their employees manage these costs.

Some businesses and local governments are cutting back to four-day workweeks, with employees working four 10-hour days instead of five eight-hour days in an effort to help employees save some money on gasoline. The city of Birmingham decided to adopt a four-day week for employees starting July 1 and starting June 1, Avondale, Ariz., will move to a four-day workweek at City Hall.

These cities are not the only employers who are offering flexible schedules in response to increasing gas prices. The Society for Human Resource Management (SHRM) recently conducted a survey, What Employers Are Doing to Help Their Employees with High Gas Prices in 2008. This survey showed that 26 percent of employers are offering a flexible work schedule in response to rising fuel costs. Eighteen percent are instituting telecommuting and 14 percent are rewarding performance with a gas card. The survey showed that 42 percent of employers are raising their mileage reimbursement to the IRS maximum.

Employers are using benefits, not increased pay, to help employees cope with rising fuel prices. This raises a larger question as to the employer's role in helping their employees to weather tough times. Perhaps there is a broader role for employers to play, not only to cope with rising fuel prices, but also to help employees to better manage their personal finances by providing broad-based, comprehensive financial education. Employers are positioned to provide trusted, just-in-time financial education in locations that are convenient to employees.

While it might appear as an altruistic move on the part of the employer, research suggests that employers do indeed benefit when they help their employees. Garman, Leech, and Grable conducted research that showed that workers who are less anxious about personal financial problems may be more productive. Providing personal finance education may also help employers with recruiting and retaining employees; however, there are a number of other cost-benefit issues that employers often consider.

The New America Foundation advocates for incentives to encourage the expansion of financial education in the workplace. There is a need for workplace financial education that is provided during the workday, in the workplace or at a nearby convenient location, and that is offered in tandem with the opportunity to utilize appropriate financial products such as a savings account, a low-cost checking account, or a low-cost prepaid card.

To expand workplace education, better information is needed about best practices and different delivery options for providing financial education, particularly for small employers operating in different work environments such as retail stores, manufacturing plants, and office settings. The New America Foundation is currently conducting research to better understand the motivations of employers who are offering financial education and perceived benefits for the company. The Foundation is also exploring the challenges, barriers, and the costs of providing education--including the implied liability cost from providing information which turns out to be wrong or misleading and results in employee loss. A full report will be published this fall.