Money worries are a significant contributor to employees’ lack of well-being and can have a devastating impact on workplace productivity. Right now, 1 in 3 employees say their financial stress is impacting their ability to focus on their jobs, and nearly 25% say this stress reduces their productivity and confidence.

By implementing comprehensive financial well-being benefits programs that help people deal with the root causes of their financial stress, employers can improve both workplace productivity and overall employee wellness. 

Let’s explore the link between financial stress and low employee productivity and consider key strategies for reducing them.

Employee Financial Stress in 2024 – the Numbers

A recent Mercer study uncovered surprising statistics about the level of financial stress American workers are under and its adverse knock-on effects:

• More than 1 in 7 employees say that high inflation and market volatility have significantly increased their financial stress.
• 51% of employees say they’ve reduced discretionary spending due to economic concerns. Another 37% have reduced or tapped into their savings.
• When asked to rank their top concerns regarding work and life overall, financial stressors topped the list, with 9.6% citing ‘covering monthly expenses’ and 9.2% saying ‘being able to retire.’
• More than 10% of all workers have at least some concerns about their financial health.

How Financial Stress Can Devastate Workplace Productivity

Financial stress has long been linked to poor outcomes at work:

1. It Can Cause Employees’ Physical Health to Suffer

Money worries can lead to physical health issues that ultimately require medical intervention. A report from the American Psychological Association (APA) found that employees with high-stress levels are 3 times as likely to experience headaches and fatigue compared to workers with average stress levels.

These physical health problems can prevent employees from coming to work as their best selves and ultimately decrease productivity.

2. It Can Damage Workers’ Mental Health and Concentration

Money worries can also impact your employees’ mental and emotional health. PwC’s 2023 Employee Financial Wellness Report found that more than half of employees say they’ve experienced decreased self-esteem and mental well-being due to financial stress.

Mental health effects of financial stress can include employees feeling anxious, nervous, sad, or depressed. All these symptoms can make it even more difficult for them to concentrate and remain engaged throughout the workday.

3. It Can Make Them Feel Disconnected from the Company

Employers often overlook that employees’ money worries may not only relate to longer-term debts such as mortgages or student loans. Financial stress can also result from day-to-day expenses, like grocery bills, child care, or paying for transportation to work. Over time, employees’ financial distress can lead to low morale and presenteeism.

Money worries can also impact retention. The PwC report revealed that employees under financial stress are 33% more likely to feel disconnected from their company than those who aren’t financially stressed. A reduced sense of belonging at their workplace can lead workers to look for another employer.

Critically, the report also revealed that more than 50% of all employees say they’d be attracted to a company that cares more about their financial well-being. This highlights a growing trend of workers seeking employers that make them feel supported in their financial struggles.

Boost Work Productivity with a Comprehensive Financial Wellness Program

To have an engaged, productive, and healthy workforce, companies need to focus on the “whole employee.” As a first step, organizations should ask their employees what they need and listen to their responses. They should then develop customizable financial wellness programs and expand the resources they offer based on what employees say they need to better manage their finances.

The best financial wellness programs encompass a strategic blend of:

• Financial literacy and tips for developing good financial habits
• Digital savings and budgeting tools, calculators, and scorecards
• On-demand pay (also known as Earned Wage Access)
• 1-on-1 expert advice from qualified counselors

Payactiv – Your Financial Wellness and Workplace Productivity Partner

Financial wellness support has taken its rightful place as a “must-have” benefit for responsible employers. Payactiv has been helping companies offer financial wellness resources that comprehensively meet employees’ needs for over a decade.

Our Earned Wage Access service is low-cost to employees and zero-cost to employers. On top of that, our platform offers budgeting, saving, and debt support tools through our Payactiv app so your employees can take control of their financial futures.

In addition, with our convenient employee communication app, you can boost workplace productivity by coordinating schedules until every shift is filled. Employees can see open shifts and request to cover them with a few clicks on their smartphones.

Interested in learning more about Payactiv’s service? Book your demo now!

All content provided on Payactiv.com/financial-learning/ is for informational purposes only. Payactiv makes no representations as to the accuracy or completeness of any information on this site or found by following any link from this site. Payactiv will not be liable for any errors or omissions in this information nor for the availability of this information. Payactiv will not be liable for any losses, injuries, or damages from the display or use of this information.