Many employees are still struggling financially, even though the economy is better and unemployment is down. How bad is it? Statistics show that 80% of U.S. workers are living paycheck-to-paycheck. That causes their own financial stress and creates a problem for employers as well.
Whether it’s student loans, car payments, mortgage/rent payments, credit card debt, an unexpected expense or some other financial matter that they are worried about, employees are spending time at work on these issues rather than concentrating on the job they are being paid to do.
In fact, 43 percent of employees distracted by their finances at work spend three or more hours each week in the office thinking about or dealing with their personal financial issues, according to PwC’s 2018 Employee Financial Wellness Survey. Add that up. That’s 150 hours of lost productivity per year per employee who is sidetracked from doing their work because of financial stress.
Employees’ financial stress in the workplace
Financial stress takes both a mental and physical toll on workers, impacting health-related costs and significantly reducing productivity. These include:
Absenteeism. Financially-stressed employees use more sick leave and are absent from work more often.
Presenteeism. Although employees are physically at work, they spend time on activities unrelated to their jobs, such as talking to creditors.
Health concerns. Unhealthy workers produce lower quantity and quality of work and bring higher health costs both to the patient and the employer. Distress over financial matters can contribute to irritability, anger, fatigue and sleeplessness.
Work conflicts. Tardiness, incomplete work tasks and accidents result when workers’ personal issues interfere with their job performance.
How to spot employee financial stress
Four common signs that occur in the workplace may be signals to employers of a financially-stressed employee:
- Withdrawing multiple loans against retirement savings.
- Asking for payday advances.
- Unexpected absences. For instance, an employee who doesn’t have the money for needed car repairs may suddenly have to stay home until they figure out other arrangements.
- Medical issues that could have been avoided through preventive care that was unattainable due to large deductibles or copays.
Today’s employees need to have financial flexibility. Financial flexibility is the ability to manage expenses and make everyday life affordable by making their money do more – following a monthly budget, being wise shoppers and taking advantage of employer-offered financial wellness tools and voluntary benefits.
Read the rest of Shannon Lane’s article at Chicago Business Journal