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Stress: it's the cause of the knots in our shoulders and the tension in your jaw. It could also be the cause of lost productivity in your workplace. Over the last few years, it's become more apparent that companies cannot afford to ignore employee financial stress and its impact on the workplace.
It's no secret that the economy is volatile right now. People are still recovering from getting laid off or having their hours cut back. Many people have to do odd jobs on TaskRabbit or UberEats to make ends meet. Employee financial stress is natural, and it doesn't show signs of letting up soon. But surprisingly, companies may be ignoring a source of financial stress within their workforce — some don't even contribute to their employees' retirement savings plans.
You've probably never considered tracking your employees' financial stress levels, let alone doing anything about it. But if you did, you might be surprised to learn how your workers' financial stress impacts their personal and professional life.
BrightUp is a digital financial wellness company working to shed light on the importance of financial wellness for employees. Our company started with a simple premise: everyone should have access to financial products that help them feel financially secure, regardless of who they are and where they come from. We do this by partnering with emotionally intelligent organizations seeking to help reduce financial stress in the workplace and uplift their employees.
In this article, we'll help organization leaders and employee benefit plan administrators better understand:
- The causes of employee financial stress
- Symptoms of a financially stressed employee
- The cost of employee stress
- Steps to take to address financial stress in the workplace
What is Employee Financial Stress
So what exactly is employee financial stress? It's a lot like most other types of stress, but it's always directly tied to an employee's financial situation. Employee financial stress can be caused by a number of factors including debt, poor credit and bankruptcies. Financial stress may have a negative effect on an organization through absenteeism, lower productivity at work and higher staff turnover rates.
We dig into the details of financial stress on a personal level in another article. Here, we'll focus on how it's related to the workplace.
Causes of Employee Financial Stress
The American Psychology Association's 2022 Stress in America reports that stress about money is the highest recorded since 2015, with 65% of respondents saying money is a significant source of stress. So what's causing all of this stress?
The thing about financial stress is that everyone experiences it at some time or another. Still, it's always unique to the individual. At its core, financial stress results from a real-life financial situation that causes stress and the emotions and actions that come with that stress.
The cause of stress can vary significantly, but here are a few common reasons:
- Limited household income
- Low levels of financial literacy
- Barriers to capital
- Too much debt
- Unplanned expenses and unexpected bills
- Lack of savings
Suppose, in your youth, you witnessed your parents or guardians struggling with money or making bad financial decisions. In that case, you may even experience financial stress just from thinking about managing your finances.
An organization can help employees overcome these triggers by building an employee financial wellness program that puts each employee's emotions and diverse backgrounds first. We combine behavioral science with technology to bring a holistic approach to wealth-building. From personalized financial education to compassionate financial coaching at their fingertips, we can come together to provide a brighter future for your employees.
Symptoms of a Financially Stressed Employee
The symptoms of financial stress can be challenging to recognize. Your employees may not tell you they are dealing with a financial problem. Even if they do, the signs of financial stress are often subtle, especially initially. When an employee doesn't feel comfortable talking about their finances, there are a few clues to look for to know if your employee is financially stressed:
- Short temper
- Distracted at work
- Withdrawn or unsociable
- Absenteeism
- Anxiety and depression
- Declining quality of work
If an employee has been focused and productive but now seems distracted, unable to concentrate, and uninterested in taking on new responsibilities or projects, this could be a sign that something is wrong. For example, an ordinarily energetic and helpful employee may become quiet and withdrawn when he is struggling financially. He could also become irritable or depressed as he tries desperately to solve his problems. As a result, other employees may avoid him because his negativity is contagious.
Suppose you notice that your employee's work has taken a marked turn. In that case, she may be preoccupied with money problems and unable to focus on her job duties. As a result, she may miss deadlines, make more mistakes than usual, and display other lapses in quality or productivity. The employee may also be late to work more often than average and take longer breaks or lunches than usual.
When companies support their employees' financial well-being, they are likely to be happier, more productive, and more likely to stay with their employers longer. That's why so many companies choose to offer financial wellness programs as part of their employee benefits package.
If this isn't enough to convince you, let's keep going. Next, we'll explore the cost of a financially stressed employee and how to take steps to solve the problem.
Financial Stress in the Workplace
What does financial stress in the workplace look like? The signs are pretty straightforward—you can see it in your employees' faces, hear it in their conversations, and feel it in their interactions. You may even see it in how they do their jobs or how they let people down. But the most prominent and compelling way to think about workplace financial stress is its impact on your company's bottom line.
Cost of Employee Stress
Financial stress has a significant impact on personal and family life, contributing to worker fatigue, damaged relationships, and negative outlook, to name a few. But did you know it also affects your company?
According to the American Psychological Association, the cost of employee stress is currently estimated to cost employers $300 billion annually. This number results from high turnover, increased healthcare costs, and lower productivity.
High Turnover
There's a definite correlation between employee financial stress and higher turnover. In fact, over half of employees have changed jobs to improve their finances, according to the Society for Human Resource Management. An employee struggling financially will be more likely to seek a job elsewhere to find a higher salary or more affordable healthcare benefits.
Increased Healthcare Costs
When employees are stressed out due to financial matters, they may not get enough sleep or exercise, hurting their overall health. They might also turn to harmful habits like smoking or drinking to cope with the stress. Chronic stress can also lead to serious health conditions like heart disease. As a result, you are likely to see an increase in health-related costs at your company.
Lower Productivity
According to John Hancock, 40% of workers say they’d be more productive if they didn’t think about their personal finances at work. Stressed workers tend to lack focus and motivation, impacting your company's productivity and efficiency levels. These employees may also make more mistakes because they're simply not thinking clearly.
Steps to Take to Address Financial Stress
The link between workers' financial well-being and companies' bottom lines is so strong that more companies are now offering financial education programs to address the issue. In addition, many businesses are implementing financial wellness programs designed to help their workers manage their finances and mitigate the impact of financial stress at work.
If you're concerned about how your employees' financial stress might be impacting your business, here are some steps you can take to help alleviate the problem:
- Revisit your employee benefits plan.
- Consider launching a financial wellness program.
- Find a partner, like BrightUp, to help.
- Continually communicate and measure employee financial stress.
1. Revisit Your Employee Benefits Plan
50% of employees say they think employers have a responsibility to help employees improve and maintain their financial wellness. If that doesn't convince you to revisit your plan, we're unsure what will!
We advise that leaders and HR professionals look at their current employee benefits plan. Are you offering the best deal on healthcare? Is your matching 401k contribution enough to set your employees up for success?
Use a survey to take the pulse of your employee's opinions on their current benefits and discover which new benefits they'd like to see. This will be a great proof point for a benefit plan expansion and will serve as a benchmark for future employee surveys.
2. Consider Launching a Financial Wellness Program
After reading this article, this one should be a no-brainer. According to the Society of Human Resource Management's 2020 Employee Benefits survey, only 24% of organizations provided non-retirement financial education, and only 17% provided credit counseling services. By providing a financial wellness program to your employees, you show them that you care about their well-being. You're also creating a competitive advantage in attracting and retaining talent.
So what goes into launching a successful financial wellness program? First, you have to listen to your employees, identify goals the program should solve, find a financial wellness benefits provider, educate and communicate, and track the results.
A well-rounded financial benefits program should include:
Launching a financial wellness program can feel like a significant undertaking, so it's essential to find a benefits provider that will work with you, which leads us to step three!
3. Find a Financial Benefits Partner
Since 2020, BrightUp has worked to democratize financial wealth building and personal well-being by partnering with companies striving to give their employees a brighter future. We work with employees to provide evidence-based tools to help their employees feel financially healthy.
Our products were built to help as many people as possible reach a place of financial security. By understanding their feelings and emotions about money, we get to the root of what prevents them from feeling secure and building wealth. Our tools, content, and coaching will empower your employees and members to create stability and achieve their financial goals.
So let's get into the details of our products!
We provide human support through our financial coaches and advice. Employees can access our financial experts by text, phone, or video call whenever they need help. They tailor advice to each individual based on their stage in life and types of challenges. This human-centered approach lends a dependable helping hand on each employee's financial journey.
Financial planning tools are one of the best ways to empower employees to take control of their finances. Employees can set goals, track their net worth, learn about investing, and more in an uplifting app that pairs education with motivational messaging. By having the right tools to analyze their income, debt, and spending habits, employees can create a financial plan that works for them.
Financial education is something everyone should have access to. Unfortunately, so many workers in lower-income populations have barriers to financial literacy education. Employees who use BrightUp can access personalized financial education in the palm of their hands. Our content helps employees understand the foundations of personal wealth AND relieve stress at the same time.
Compassionate capital is one of our most essential benefits offerings. So many individuals have trouble accessing capital when they face overwhelming debt or a financial emergency. They'll often turn to payday loans and take on even more debt as a temporary solution. Enter compassionate capital, our flagship offering. Employers can provide employees with access to trustworthy, low-cost financial assistance when they need it most. We look beyond credit scores and keep interest rates low and manageable. Then, we make it easy for employees to repay their loans with a simple paycheck deduction.
Our tools, content, and coaching will empower your employees and members to build stability and achieve their financial goals. So what are you waiting for? Reach out to request a demo today!
4. Communicate & Measure
You may have found the ideal financial benefits provider, but your job isn't done yet! One of the most important parts of a successful financial wellness benefits program is ensuring it's working for your employees!
Leaders will need to clearly and continuously communicate the features and benefits of the program to encourage employee adoption and engagement. Make sure you're using what resources available to you to provide information and access to their benefits.
You'll also want to prove that your organization's investment is valuable. Make sure you're polling your employees and measuring financial outcomes to make sure that you're genuinely making a difference in workers' financial stress.
A Brighter Financial Future with BrightUp
Financial stress is one of the biggest workplace epidemics we have going on today. It affects not only the person or household experiencing it first hand but also your workplace. Workplace financial stress is something that needs to be taken seriously.
When you provide BrightUp to your employees, you give them access to a full suite of wealth-building and well-being tools. So if you're ready to embrace your responsibility to your employees' financial well-being, contact a BrightUp representative on our website today. You can also call us directly on (833) 513-1302, or drop us an email at hello@getbrightup.com.
Let's launch a financial wellness program together!
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- Financial Wellness Programs: Tips for Launching an Effective Program
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