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Employees are under significant levels of stress. The pandemic caused upheaval and uncertainty, and as we return to a new working normalcy, current economic conditions are not providing the relief that workers and businesses anticipated.
Current inflation rates, compounded by the financial concerns of the past two years, have been adversely affecting the workforce.
Financial stress spills into every aspect of our lives, including work. For some, concerns about managing today’s needs are constant. For others, plans for the future, for themselves, their children or retirement, loom large.
For businesses, the financial pressures employees hold have a direct impact on the workplace. Human Resource professionals may see an uptick in requests to borrow or withdraw from retirement accounts; requests for payroll advances; or even wage garnishments. Financial wellness programs may be a lifeline employees need to be able to get back on track.
PwC’s annual Employee Financial Wellness Survey reveals American workers are feeling the pressure. Of the over 3,000 workers across industries polled, 40% say their top financial pressure is the rising cost of practically everything in this currently economically variable environment. Less than half believe their compensation is keeping pace with rising costs. More than half, 56%, are stressed about their finances.
Financial concerns are affecting employee mental health. The study found that 49% of employees admit money worries had a severe or major impact on their mental health: more than triple the amount of those not stressed by finances (15%). Unfortunately, the stigma of asking for financial assistance, as with mental health issues, persists. More than 40% of workers admit they’re embarrassed to seek guidance on their finances.
EBN reports a direct correlation between financial stress and mental and physical health. Almost 75% of workers who experience financial stress exhibit physical symptoms. In a vicious cycle, many people feeling the stress of financial insecurity avoid addressing their healthcare needs; they fear the cost of services outweighs their need. In addition, almost two-thirds of workers who believe their productivity is impacted by money worries feel the stress has significantly affected their self-esteem.
American employers spend about $300 billion annually in healthcare costs and absenteeism due to the toll of financial stress, and an estimated 80% of workplace accidents are related to this. Workers may be too stressed, too tired, or too distracted to work safely.
Physical health suffers when employees experience financial stress. Benefits News reports employees with financial woes are 11 times more likely to have sleepless nights. These can translate into tardiness, absenteeism, or workplace accidents. On the job, these workers are 10 times less likely to finish daily tasks and 9 times more apt to have difficult relationships with coworkers.
Employee financial concerns directly impact the workplace. PwC found nearly 40% of workers financially stressed are considering or looking for another job: the main reason — more money. That’s double the rate of employees who feel financially secure.
Financial pressures equate to 41% of workers admitting that stress is impacting their productivity; 42% say it’s influencing retention; 35% say it’s affecting attendance; and 69% report lower engagement. Another 25% of workers have taken on additional jobs to make ends meet. When employees are overworked, performance can suffer and accidents can occur.
The cost of financially-stressed employees is estimated at almost $5 billion per week for employers. A survey from BenefitsPRO found that 20% of workers reported their financial health worsened during the pandemic. The PwC survey revealed over 50% of financially-stressed workers who spend three or more work hours per week dealing with personal money issues.
When it comes to the future, a Yahoo survey from 2019 found almost two-thirds of Americans have little to no money set aside for retirement. The fallout from the pandemic has likely increased that percentage. PwC found that 25% of workers have less than $1,000 for retirement. In fact, more than half of the workers surveyed intend to postpone retirement due to financial concerns.
For businesses that want to attract and retain talent, lack of retirement readiness can be highly problematic. When senior staffers are unable to retire with financial security, the junior staff will have no pathway to advancement. This causes churn in the lower ranks while businesses continue to pay premium wages for more tenured employees.
In the wake of the pandemic and the havoc it continues to bring, few businesses have been unaffected. The repercussions will likely be felt for years to come. For business leaders, long-range recovery plans are being discussed — specifically, a focus should be placed on immediate assistance for workers suffering the pressure of financial stress. PwC found that for employees looking for another job, 78% said they would be attracted to a company that cares about their financial well-being.
An investment in employee financial wellness programming has a strong return on investment. Not only is retention improved, engagement is enhanced. Mercer reported that workers with access to employer-provided financial wellness programs report higher levels of satisfaction with their job and employer — twice as much as those without. Even staff who do not utilize the program report higher levels of trust and satisfaction with their company.
Their findings also reveal what forms of assistance employees want. The majority don’t want direct assistance from their employer: they’re most satisfied if their company brings in financial experts to provide training and education. The next most requested option by employees was for the employer to provide referrals to financial planners and advisors the company endorsed.
When a business invests in financial wellness programming, everyone benefits. Staff are able to find assistance for immediate need; develop tools and strategies for sustainable budgeting; and make long-range plans for homeownership, college, and retirement.
For organizations, the path to financial security for workers translates directly into higher retention, engagement, and productivity. Organizations benefit by experiencing lower healthcare costs, reduced accidents on the job, and fewer absences. When economic conditions are good, financial wellness programming is a good benefit to offer. When times are as challenging as today, they’re a must-have for business and staff.