5 Astounding Facts That Show Financial Stress Is Costing Employers Billions In Productivity
5 Astounding Facts That Show Financial Stress Is Costing Employers Billions In Productivity
They say money can’t buy happiness.
It seems that while they’re right, money can cost you your happiness - if you’re an employer. The financial stress facing many employees today is having an enormous impact on their productivity at work.
Now if you're an employer who has several employees dealing with this problem, it's going to affect their performance, their engagement and their productivity — all of which could cost your company money or hurt its reputation with customers. That's a lot of pressure!
Take a look at 5 astounding facts that show how financial stress of employees is costing employers billions and why employee financial wellbeing matters.
1. Nearly 50 Million American Adults say they couldn't pay their bills if they missed a single paycheck.
The United States economy is booming. Americans are still overwhelmingly stressed about their finances.
Half of American adults live paycheck to paycheck, a new study from NORC at the University of Chicago finds, and nearly 50 million adults say they couldn't pay their bills if they missed a single paycheck.
"Most employee's financial health is not as good as they think it is," says Bruce McClary, vice president of communications at the National Foundation for Credit Counseling.
2. Financial stress at work is a $300 billion problem.
When employees are stressed about paying bills, they are less likely to perform well at work.
It's estimated that lack of employee financial wellbeing costs employers around $300 billions each year in lost productivity.
People who are financially stressed are more likely to suffer from depression and anxiety. This leads to deep effects on productivity in the workplace.
3. Financial stress is a major cause of absenteeism.
Many employers don't offer financial education services, which means they may unknowingly be contributing to their employees' financial stress in the long haul.
If you want to grow your business, you need to stop thinking about employees as machines that are only productive when they're clocking in. Instead, think of them as humans who have lives outside the office
Today's economy is built upon the productivity of employees — and they're increasingly stressed out and disengaged.
Only then can you start making your company a place where people want to show up every day. And, if you do it right, it'll also make your company a place where people never want to leave.
4. 80% of Americans report that they have enough money to meet their basic expenses, but are worried about having enough for retirement.
Employees who deal with financial stress most frequently exhibit greater cognitive and emotional exhaustion, which can impact every aspect of the employee experience -- over time and overall.
Financial stress and its effect on the workplace is not a new phenomenon. However, with new research, we're learning more about the long-term effects and how it may be affecting employee performance.
It is important employers take action towards their employee's financial wellbeing to avoid these costs.
5. Financial stress can threaten employee retention and attrition by making it difficult for organizations to retain talented workers.
It is also a major contributor to employee turnover, potentially costing employers millions in turnover-related expenses like recruitment and severance costs.
Financial stress is the number one cause of employee stress and can have a dramatic impact on your overall health. Since the beginning of the pandemic, it is becoming even worse leading to lack of work satisfaction. This can take a toll on their personal life, as well as their overall well being.
It is a significant source of workplace distress that can affect employee performance and productivity
The above eye-opening facts show that employee financial stress is a killer to the organization's success. For an employer, stress can cost billions of dollars in lost productivity, absenteeism and medical expenses. For employees, stress can cause sleepless nights, strained relationships with family members and friends, and impulsive decisions affecting long-term financial stability.
Presenting the solution
This is a big problem for many Americans, and for employers who have to deal with less-productive workers! It can also affect productivity and engagement, which is why so many companies are looking for ways to help employees manage their personal finances.
Invest in your employee's financial literacy and help them manage their finances better. Research shows that organizations may benefit from offering programs that help employees better manage their finances.
It also indicates that addressing these issues could lead to a more productive workforce and better engagement among employees.
Financial simulations are a great way to help employees understand their finances and make decisions as if they were in real life -- without actually having to spend money. It’s like playing a game where you learn about your finances.
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With this game based learning, employees can see how their choices today will affect them tomorrow -- and what the potential costs will be for them and their family. And if it’s done right, it can help employees make better choices for themselves and set goals for the future.
Bonus:
Upskill your employees using our "Financial Wisdom Demystified" simulation program to help employees get rid of their financial stress and develop sound financial decision-making skills. Explore Financial decision making using simulation!