New survey reveals the hidden cost of financial stress on employees
A new survey found that financial strain is hindering employees from participating in social events, impacting both personal and professional relationships.
According to BrightPlan's 2023 Wellness Barometer Survey, which included C-suite executives, HR leaders, and employees, 92% of respondents expressed stress regarding their finances.
This financial burden not only caused distractions at work but also negatively affected social wellbeing, with 64% reporting its adverse impact. As a result, 72% admitted to declining invitations to weddings, birthdays, and gatherings with friends, family, and colleagues.
The consequences of employees' financial struggles extend beyond their personal lives, with half of the respondents indicating decreased engagement and productivity. C-suite executives reported a loss of 16.8 work hours per week, while HR leaders reported a loss of 12.4 hours per week. Consequently, organizations suffer an annual loss of nearly $200 billion.
"When an employee is stressed about finances, that's top of mind for them," said Marthin De Beer, CEO of BrightPlan.
"You cannot show up as your best self at work and it leads to social stress in your relationships. There is also a real impact on the bottom line of a company. Employees might be at the office, but dealing with other issues or just can't focus. It's a very smart business decision to address this issue."
To help employees regain financial stability, employers can leverage existing benefits that promote financial preparedness. This is a crucial factor for stability, the survey suggests. However, only 18% of participants demonstrated basic financial literacy.
The survey also revealed that 85% of respondents carry debt, with almost half considering it unmanageable. More than a third lack emergency savings or have only enough to cover two months' expenses, while over half save less than 10% of their income for retirement, if anything at all.
The survey also found that while 95% of leaders believe they should offer financial wellness benefits, less than half of employees utilize the available options beyond retirement matching and company stock options.
De Beer suggested that implementing a financial wellness service combining digital tools and personalized support can improve employee engagement.
"Employers can be overwhelmed by which choices they need to make when they look across a benefit portfolio, and they find it very hard to optimize," De Beer said.
"If you can give clearer and more personalized guidance in your benefits election, it will lead to higher-quality outcomes for the employee. A financial service can answer questions proactively through education, but also reactively with a human adviser who can help them make the right benefits selections."
The survey also found a decline in employee trust from 83% to 63% over the past year, underscoring the need for meaningful connections within organizations.
"There's a major disconnect which is eroding trust because people are struggling, and they're not feeling that companies are stepping up to help in ways they can," said De Beer.
"When managers step up, not only does it lower financial stress, [improve] personal relationships and allow employees to bring their best selves to work, but it also engenders a tremendous sense of loyalty. When you help employees with their personal finances, help them send their kids to college and achieve their life goals and dreams, you truly become the best place to work."
