In 2023, PWC conducted a financial wellness survey for employees, which showed that about 45% of employees stated that financial matters are usually the most stressful part of their lives. Employees are the most essential asset in every business. As a result, their financial wellness or health is a crucial factor for every business or organization.

However, there are not enough HR strategies to cover this area. The financial wellness of your employees is critical to getting a productive workforce. Below, we will explore the relationship between workplace productivity and the financial health of your employees, highlighting how positive and negative financial health can affect your business and how employees can ensure financial wellness in their employees.  

Reduced focus

Employees with financial woes are often more likely to develop health issues. Financial distress usually leads to stress and worry, as employees are more likely to get distracted. This can cause nonattendance on the part of the employee due to feeling overwhelmed and sleep issues. The result is more sick leave by affected employees.

A financially stressed employee might also be physically present in a workplace but mentally occupied with financial worries. This can cost a company and affect its organizational productivity. Financial stress can reduce the decision-making ability of an employee, resulting in incomplete and lacking assignments or task errors. 

Decreased company culture

Stress affects the morale of your employees. When employees are burdened by money issues, they tend to have more troubled relationships with coworkers and are more likely to be in search of new jobs that will pay higher. This can pose a variety of risks for your business from increased training costs, HR workload and trouble training employees. 

Enhanced job satisfaction

Companies or businesses that ensure employee well-being usually enjoy increased retention rates. This is a significant benefit of financial wellness in the workplace. By offering financial wellness programs and ensuring employees’ financial health, employers make employees more confident about their financial situation. 

Increased turnover

Employee turnover can be quite time-consuming and expensive, based on the required level of training and position. An employee’s happiness depends on various factors, though it is only directly correlated to pay. However, feeling financially stretched can easily make an employee change their career path. 

Late retirements

Research by Morgan Stanley shows that about 40% of employees plan to delay their retirement. This can affect your business by workers’ compensations, health care costs, and wages. According to research, a one-year delay in retirement can result in about 1% to 1.5% increases in the annual workforce for your entire workforce and an increase of about $50,000 for people who delay their retirement. This shows the cost difference between a retiring employee and getting a skilled replacement. 

Increases concentration

When an organization addresses the cause of financial issues, it creates a happier and healthier workplace. The positive effects can be seen in their employee’s well-being and performance. Addressing your employee’s financial issues is an investment in your business’s long-term growth and success. A fully focused workforce means your employees provide their best output and interact with your customers in a desirable way. They are more motivated and engaged and bring their best professionally. 

Affects health

Stress can affect the overall health of an employee such as sleep dysfunction, depression and weight gain. workers who feel financially unwell have a higher chance of suffering from such side effects. This affects work performance and increases time off. Financially stressed employees are more likely to take more time off in a year, and many employees experience financial stress that affects their work. 

Ensuring employees’ financial wellness

Employers must be aware of their employee’s financial stress and address it. Financial wellness isn’t a feel-good initiative. These programs reduce employees’ financial stress and provide support on how to manage their finances effectively. Most of the time, combining financial education initiatives and other measures can help. Some options to consider include:

• Offering financial well-being educational resources: Employees can offer online resources, seminars, and workshops that help employees in the journey of financial wellness. 
• Offers tools that help attain final goals: Employees can also offer tools that help employees manage money. These tools include final calculators, money mindfulness resources, stress analytics, and money personality apps. These tools can help them monitor their money management ability when taking e-transfer payday loans, paying debts, saving for retirement, or student loans. 

Endnote

Supporting the financial well-being of employees is an essential aspect of every company or organization. It should be a crucial part of your company’s well-being strategy. Many employees suffer from poor financial health, so it is important for employers to support and empower their employees. By offering support, you improve their work performance and also make a difference in their quality of life.