Financial stress is an issue that affects millions of employees worldwide. The fact is, financial stress can have a detrimental impact on employee well-being, absenteeism, and productivity, as highlighted in several recent studies.
For instance, a recent survey conducted by WTW revealed that in the United States alone, 41% of full-time employees reported living paycheck to paycheck. These employees also reported double the level of anxiety and more than two extra days of lost productivity due to 'presentee-ism.' Moreover, these employees pose greater retention risks, with 37% actively searching for a new job in the past three months, compared to 21% of their peers. Financial stress also leads to poor lifestyle choices and behaviours, with employees living paycheck to paycheck more inclined to avoid or delay medical care and having poor eating habits.
Furthermore, the WTW survey found that 49% of employees have suffered a financial shock, such as a significant medical expense, a cut in working hours, or fraud. Employees suffering these shocks are more likely to make decisions that may undermine their long-term financial security, such as taking a home equity loan, being unable to pay bills, or taking a salary advance.
This is not just a problem in the United States. The WTW survey also found that over 1,000 responses from Australia showed 30% of employees are looking for a new role, and an additional 21% are open to offers. In addition, 60% of employees do not feel secure in their financial wellbeing, and 42% are living paycheck to paycheck, up from 33% in 2019.
The impact of financial stress on absenteeism and innovation is also evident, as highlighted by a recent report published in the International Journal of Environmental Research and Public Health. Employees with higher levels of economic stress show higher levels of absenteeism, contributing to a decrease in innovative behaviours.
Therefore, it is crucial for employers to address this issue by implementing financial wellness programs to help their employees manage their finances better. According to the PWC Employee Financial Wellness Survey, 45% of employees who use their employer's financial wellness program report higher productivity, while 47% say they have reduced their financial stress.
In conclusion, it is evident that financial stress has a detrimental impact on employee well-being, absenteeism, and productivity. By implementing financial wellness programs, employers can help their employees manage their finances better and improve their overall well-being, leading to a more engaged and productive workforce.
WTW: "2022 Global Benefits Attitudes Survey"
PwC: "2022 Employee Financial Wellness Survey"