Financial stress-induced Absenteeism
Organisations are constantly seeking ways to boost productivity and reduce costs. One critical factor that often flies under the radar is employee absenteeism, particularly when it’s driven by financial stress. Recent research has unveiled a compelling link between financial wellbeing and workplace attendance, suggesting that investing in your employees’ financial health isn’t just a nice-to-have perk—it’s a strategic decision that can significantly reduce absenteeism and improve your bottom line.
The alarming cost of financial stress-induced absenteeism
The average employee loses 4.7 workdays per year due to financial concerns – equivalent to a staggering 16 million workdays lost, or an annual bill of £3.7 billion for UK businesses because of financial stress!*
These numbers paint a clear picture: financial stress is a significant driver of absenteeism, and it’s costing businesses dearly across all sectors.
This chart from Aegon shows the situation getting worse not better, with some industries like Health and Arts and entertainment almost doubling their absences over 2 years due to financial stress.
The impact of financial stress doesn’t stop at absenteeism. It extends further to the phenomenon known as “presenteeism”—where employees are physically present but mentally distracted. This means that even when financially stressed employees do make it to work, their productivity and focus are likely to be compromised.
This hidden form of absenteeism is estimated to cost UK employers a further £6.6 billion annually. When combined with the cost of absenteeism, financial stress is costing UK businesses over £10 billion a year! *
Why does financial stress lead to increased absenteeism?
While a day or two off work to speak to the bank may not be uncommon, the main problem is that financial stress is making people genuinely ill.
Recent research from University College London (UCL)** provides some fascinating insights:
“Financial stress disrupts the healthy interaction between our immune, nervous, and endocrine systems, which is crucial for maintaining good health.”
As a result:
- Financial strain is associated with a 59% increased likelihood of belonging to a high-risk group for poor biological health four years later.
- Financial stress compounds pre-existing stresses, increasing health risks by a further 19%.
In simple terms, when employees are under financial stress, it doesn’t just affect their bank accounts—it impacts their physical health, in the immediate and longer term, making them more susceptible to illnesses and, consequently, more likely to take sick days.
The business case for tackling financial stress-induced absenteeism
Given these findings, it’s clear that addressing employee financial wellbeing isn’t just a feel-good initiative—it’s a smart business strategy to combat absenteeism.
Furthermore, a well-designed financial wellbeing strategy has many more significant benefits, including increased productivity and improved employee retention, further reducing turnover-related absenteeism.
An investment in financial wellbeing is an investment in the long-term success of your organisation. It’s time to prioritise financial wellbeing and reap the rewards of a healthier, happier, and more present workforce.
Sources:
*Centre for Economics and Business Research report for Aegon 2023
** UCL news article: Financial stress linked to worse biological health, January 2024.
