The Hidden Cost of Employee Financial Stress in your Organization
In today’s competitive corporate environment, optimizing employee productivity is a key challenge for employers. Even with 66% of employees stating their personal finances are negatively affecting their work and personal life, the impact of financial stress on workplace performance can at times, be overlooked. Financial concerns can severely derail employees’ productivity. As an organization, it is vital to recognize the detrimental effects of financial stress and take proactive measures to address this issue.
Between inflation and rising interest rates, Americans are experiencing mounting debt. Two in five employees report being overwhelmed by debt, living paycheck to paycheck – currently 63% of workers are, and struggling to meet essential expenses – 75% of employees say inflation plays a role in their rising stress levels. These concerns can significantly distract employees, resulting in reduced focus, motivation, and overall productivity at work.
Ceridian reported that 82% of American workers think about personal finances while at work, resulting in an estimated $664 billion in lost productivity. With a heightened number of workers shifting focus to combat their financial woes, organizations can feel the impact.
Financial stress doesn’t only affect employee productivity, it can lead to increased employee turnover. In fact, PwC reported financially stressed employees are twice as likely to be looking for a new job. Turnover and loss of employee retention can disrupt team dynamics and increase costs related to talent acquisition and training. Organizations can risk losing top talent to competitors who offer better financial wellness benefits and support.
Employee financial stress carries hidden costs that can impact an organization’s productivity, employee turnover rates, retention rates, and overall success. Employers play a pivotal role in recognizing these challenges and taking proactive steps to address them. By implementing a comprehensive financial wellness solution with the products, tools and services to help employees stabilize current financial challenges and then ladder up to greater financial security, organizations can create a supportive environment that fosters employee wellbeing, productivity, and long-term success. Investing in the financial health of your employees is not only beneficial for your organization, but is also a testament to your commitment to their overall wellbeing.