SJF Employee Financial Stability Webinar Offers Solutions

Yesterday afternoon, SJF was pleased to host an Employee Financial Stability Webinar. This hour-long session allowed four presenters to give tips on how best to help workers improve their financial standing. This topic is particularly pertinent today, as the United States wades through a troubling recession. As a result, many families struggle to stay afloat financially. Fortunately, our presenters offered lots of best practices and other useful information designed to help businesses assist their employees. The webinar presenters were Janet Raffel of JE Raffel & Associates; Alison Yonas of Latino Community Credit Union; Larrey Riddle of MACED; and Karen Clay of entrepreneurial firm Ryla. Anne Claire Broughton of SJF Advisory Services moderated the event.

Raffel put the current financial crisis in context, explaining how easy access to credit cards, the bursting of the real estate bubble, and a lack of personal and family savings habits can easily result in financial crisis for families. “When problems strike, there’s not a lot of a nest egg to fall back on,” she said.

Raffel listed several “warning signs” for employee financial problems, including: seeking payday advances, wage garnishments, speaking to creditors during work hours, and an inability to contribute to health insurance or a 401k. Raffel said these behaviors can translate into reduced productivity and therefore lowered company profitability. “If you have a lot of these factors, then your employees’ financial stress could be hurting your bottom line,” she said.

She said companies could offer confidential financial assessments, provide financial education, and locate community groups that can help workers with counseling and other consumer services.

Next, Yonas shared the Latino Community Credit Union’s successes with helping “unbanked” Latinos get needed financial services. The credit union, which now has more than 50,000 members through eight branches, serves many people who previously had not used banks. The credit union offers an extensive financial education program with workshops, counseling, and other services. In addition, the organization provides home loans and “credit-builder” loans for people who have no credit history.

Riddle, with the Mountain Association for Community Economic Development (MACED), works in Eastern Kentucky and the Central Appalachian region. He cited the negative effects of financial stress on employees, and spoke especially of the cycle some enter with payday lendors. Riddle said one of these businesses was opening in Kentucky every four days and noted that predatory lending costs Americans in excess of $8 billion a year. He also pointed out that only 2 percent of people who take out payday loans pay them back completely with their next paycheck. He said people often will pay back a minimum amount and then the amount owed quickly balloons.

In order to encourage savings and good financial habits, MACED offers a Save It! loan. This initiative bundles a small loan and a savings account; Riddle said his organization is currently exploring whether or not this program could be expanded.

Clay, vice president of marketing for Ryla, an SJF portfolio company based in Kennesaw, GA with 2,500 employees, described several ways employers can improve their employees’ financial standing, including: forming partnerships with area nonprofits to provide consumer credit counseling and other services to employees, going to a "paper-free" payroll system in which employees are paid via a universal check/debit card which can save them $30-$40 monthly in check cashing fees, and establishment of an onsite café which is partially subsidized by the company. Ryla is also planning to re-launch its 401(k) program with a company match to encourage participation. Clay mentioned that the company has also learned from initiatives that didn't work, such a gold-to-cash conversion program. And finally, Ryla also has a "we care" campaign that includes randomly paying for an employees' lunch, the occasional gift of a gas card, and the chance to win a car at the end of the year.

Several presenters mentioned Balance as a useful resource for businesses that are members of credit unions; see for information and financial counseling and education resources.

This webinar offered many best practices and other suggestions for assisting workers financially, particularly in the midst of tough economic times. We thank our panelists and participants for their great information and questions. Look for more SJF-sponsored webinars in the future, and please give us your feedback on this blog and our other Web content.