Unfortunately, a large number of Americans stress about money, and it’s likely that stress is damaging your company’s bottom line. Personal financial stress can seep into the workplace and begin to affect employee productivity. Just because your organization provides respectable wages does not mean that you’re immune to financially stressed employees.
Those checklists your employees dreamed about in their formative years that included a house, kids and a nice car have become prohibitively expensive in modern society. The rising cost of the American Dream has crippled many employees who, despite making reasonable salaries, still find themselves living hand to mouth. In fact, a PricewaterhouseCoopers employee financial wellness study of 1,700 full-time employed adults found that almost 50 percent of employees carry a credit card balance. And of those, a full 26 percent have difficulty meeting minimum payments.
Although 401k plans abound, saving for retirement does not often come in the form of a luxurious retirement plan. This leaves employees on their own to set up and maintain reserves for their future. Without proper guidance, this type of additional responsibility can add even more stress to their financial situations. This stress affects not only the employees’ personal lives, but their professional lives, as well.
Compromised employee health
Financial issues can affect employees on many levels. When stress levels rise, health deteriorates in response. Stress can lead to health issues such as depression, weight gain, lowered immunity, sleep dysfunctions, heart disease and other physical problems. It also increases the chances of absenteeism, psychological issues, attitude problems and a host of other mental and emotional concerns.
These issues not only limit productivity, but they also reflect in higher healthcare premiums for your business. With fewer days in the office, those positions held by stressed out employees begin to lose their value. Unscheduled absenteeism is costly, and stress-related illnesses can send employees home much more frequently than desired.
Lowered employee job performance
Mental distraction, morale issues and lackluster efforts can all be results of the stress that financial trouble puts on your staff members. Employees preoccupied by financial issues can be, although physically present, mentally absent. If employees are distracted, they may be spending an exorbitant amount of time in the workplace dealing with financial issues in the form of time spent on the phone bargaining with collectors, paying bills, managing accounts and, yes, even shopping to relieve the stress of financial trouble.
Financial stress also causes workplace fatigue and burnout, leading workers to exhibit listlessness while at their job site. In addition, a loss of sleep over money issues can significantly lower an employee’s ability to think critically and problem solve effectively. In an environment where physical injury is a risk, the inability of distracted workers to focus on the task at hand is much more hazardous than for those workers who are simply dozing off at a desk job. Workplace accidents that result in an inability to focus, remain alert and stay on task can cost your company a significant amount of money in workers’ compensation cases that could have been avoided with a bit of financial guidance.
Lessened employee commitment
Replacing employees can be costly for any business, and in some cases, financial stress may be to blame. Whether or not employees perceive their salary as directly to blame for their budget concerns, these types of worries can weigh on an employee’s commitment to their company. A financially stressed worker is more likely to exhibit signs of dissatisfaction, leading to lowered morale and a lack of longevity with the company. As they continue to look outside the walls of the business for additional ways to help ease their financial burden, turnover increases and employees become less fastened to their positions. Financially stressed workers are also more likely to bend their ethics to get ahead. This can result in employee theft in the form of both physical assets and, more seriously, critical business data.
Educating to ease financial stress
Although financial stress increases at lower incomes, salary is less of a factor in financial stress than would be expected. Individuals at all financial levels are found living paycheck to paycheck, despite a perceived overage of funds. Although most people are thinking about money, their ability to cope with their finances is still found to be a hefty challenge.
Teaching your employees how to properly manage their finances can go further in helping them ease their stress than just about any other solution. Consider adopting a schedule of financial counseling where employees can attend a quarterly session to learn financial skills that can help them better manage their money. You can also consider providing free access to one-on-one financial counseling sessions or self-serve education resources so that employees can learn on their own time. Education can help individuals learn how to evaluate and decrease their expenses, control their credit scores, clarify budgets and goals, make savvy financial decisions and put them back in control of their financial health.
The well-being of employees in the workforce is driven in part by the state of their financial health. Without proper management of financial obligations, workers can suffer from distractedness, physical and mental impairments, a lack of attentiveness and a drop in morale and commitment. By extending a hand and providing employees with financial education, you can help protect some of your most valuable assets.