Organisations are constantly seeking ways to boost productivity and reduce costs. Imagine trying to focus on a complex task while a constant worry nags at the back of your mind. For millions of workers, this is a daily reality, with recent research revealing that 36% of employees worry about money always or often and 87% of employees say that money worries impact their work.*
Financial stress is becoming a global issue that’s eating away at workplace productivity. But what exactly does this look like in practice?
The ripple effects of financial worry
Financial stress doesn’t just stay at home when employees clock in. It manifests in various ways that directly impact job performance:
- Presenteeism: Employees may be mentally preoccupied, reducing focus, efficiency and engagement.
- Absenteeism: Financial stress can contribute to physical and mental health issues, increasing sick days. See our blog on Absenteeism here
- Increased Turnover: Financially stressed employees are more likely to seek higher -paying jobs elsewhere, with the cost of hiring and training a replacement often as much as 50% of their salary costs.**
- Impaired Decision-Making: Constant worry about money can cloud judgement and affect work-related decisions.
The cost of these issues is far from trivial, as shown in the analysis:
Barclays estimates that for every £1 million spent on payroll, there’s a 4% loss in productivity due to poor employee financial wellness. For larger organisations, this can translate to millions in lost productivity annually.
Why is financial wellbeing so important for productivity?
On the flip side, when employees feel financially secure, the benefits to both individuals and organisations are substantial:
- Reduced Stress: Financial worries can be a major source of stress, reducing this leads to improvements in concentration, making decisions, and completing tasks.
- Improved focus: Employees who are not worried about their finances can be more focussed at work and are less likely to be distracted or take time off to deal with finance issues.
- Greater loyalty and job satisfaction: Financially secure employees are happier, satisfied with their jobs, and less likely to seek opportunities elsewhere. They’re also more committed to their employer and supportive of their colleagues.
So what can employers do?
There are several ways employers can support employees’ financial wellbeing, but recognising its importance is the first step. Since every workforce is unique, it’s crucial to understand your employees’ specific needs. By identifying where your benefits can have the most impact, you can tailor your offerings accordingly.
Once your benefits are aligned, focus on communication. Don’t assume that email is the best choice just because it’s easy – find the communication method that resonates most with your employees to ensure maximum engagement and uptake.
Finally, regularly review your program. Monitor participation, track engagement, and gather feedback from employees to see what’s working and what’s not.
For more help to revamp your financial wellbeing program, look out for our forthcoming guide to implementing a successful program.
The future of financial wellbeing in the workplace
The link between financial wellbeing and productivity is clear and significant. By investing in employees’ financial health, employers can boost productivity, reduce costs associated with stress and turnover, and create a more engaged and loyal workforce.
Supporting financial wellbeing isn’t just the right thing to do – it’s a smart business decision that can lead to a more productive and successful organisation. program.
Sources:
*Close Brothers report
**Lyra Healthcare: The Value and Impact of Workforce Mental Health
