January is Financial Wellness Month and employees are reviewing their finances and likely making a money-related New Year’s resolution. At the same time, employers should be looking for signs of employee financial stress and considering the effect that employees’ financial flu has on workplace productivity and the bottom line.
Purchasing Power identified five signs of employee financial stress which include:
- withdrawing multiple loans against retirement savings;
- asking for payday advances;
- unexpected absences;
- spending time dealing with personal finances while at work; and
- medical issues that could have been avoided through preventive care.
“When employees are distracted at work by their financial situation, they perform personal financial tasks while on the clock and take more sick days. That means job performance suffers.
Their financial situation doesn’t just affect the employee. It’s a big drain on the employer as well,” Christy DeFrain, Vice President, Account Management, says.
Just how widespread is the financial flu among employees? Employees working full-time surveyed recently through a Harris Poll last November on behalf of Purchasing Power revealed that 82 percent have financial stress. One in three (34 %) have had trouble meeting monthly household expenses, like rent/mortgage, car payments, cable bills and credit card bills. Further, 40 percent report that they don’t have at least $2,000 in emergency savings for unexpected expenses such as car breaking down, refrigerator needing replacing or an unexpected health emergency that may occur.
The Harris Poll question impacting employers the most indicated that one in three (34 percent) of employees spend two to three hours per week at work thinking about or dealing with their personal finances. Keeping employees focused on the work that matters while at work is vital to any organization’s success. Losing even one hour a week per employee can silently drain a company’s bottom line. Poor financial health is also responsible for employee illness, not to mention increased absenteeism, tardiness and turnover.
“Employers should proactively address their employees’ current financial stability as it helps both the employees and the company’s bottom line,” DeFrain explains. “But even more, employees are expecting companies to help them build a financial safety net through their benefits package. Most companies are already providing core benefits, but employers to need dig deeper and offer a wide variety of voluntary benefits to help increase employees’ financial well-being, resulting in a more focused, productive workforce,” she added.
Purchasing Power’s infographic, “5 Signs of Employee Financial Stress,” illustrates the statistics behind the five signs.