Financial Stress and the Employee Experience

“What causes you the most stress?”

Over the past five years, roughly half of all employees (53% in 2017) say they feel stressed dealing with their personal financial situation. And, nearly half of all employees (46%) say that financial challenges cause them the most stress in their lives.

Although we do see some connection between salary levels and stress, an increase in salary does not eliminate stress and can sometimes simply shift the focus of the stress to another area. When asked about their financial worries, both groups most frequently cited not having enough emergency savings as a top financial concern.

Based on the results of the PWC’s 2017 Employee Financial Wellness Survey, 30% of employees are distracted by their finances at work and 46% of the distracted employees say they spend three hours or more at work each week dealing with issues related to their personal finances.

This graphic shows the estimated productivity cost impact of those distractions at $3.3M per year for an employer with $10,000 workers.

Employers may also incur costs from lost productivity due to absenteeism. 12% of employees admit to missing work occasionally due to financial worries which, as an estimate, could cost an employer with 10,000 workers an additional $166,000 per year.

If your company has a particularly large contingent of Millennials, the numbers may be even more dramatic given that 37% of Millennials say their finances have been a distraction at work. Of that 37%, 49% admit to spending three hours or more at work each week dealing with personal finance issues.

Financial stress may also influence employee engagement. We are seeing some signs that loyalty, appreciation for salary and benefits, and recruiting may be linked to overall financial wellness. For example, employees who are reporting financial stress are less likely to think their employer cares about their financial well-being, and are more likely to seek out an employer that does.

Employees who report financial stress are much less likely to feel their compensation is keeping up with the rising cost of their expenses - 58% say it isn’t, as compared to 28% of those not reporting financial stress. Stressed employees are also less likely to believe their employer benefit plans are competitive with other organizations - 60% say they are, as compared to 67% of non-stressed employees.

Engagement and stress could also have an impact on recruiting efforts. Many of the best employees are referrals from your current employee base. This word of mouth can reduce the time, effort, and cost of recruiting new employees. Those who are reporting financial stress are not as likely to be proud to work for their employer (72% vs. 77% of those who are not stressed) and less likely to recommend their employer as a great place to work (66% vs. 72% of those who are not stressed).