Do you know what’s keeping your employees up at night?

Many employers would say that the answer to this question is simply “none of my business”. However, considering mental stress is costing Australian businesses approximately $10 million a year[1], smart employers will want to make it their business.

Going back to the original question: what are your employees worried about?

The answer for around half of them is likely to be money.

 

How big a problem is employee financial stress?

According to the 2014 Stress and Wellbeing Survey, personal financial issues are the leading cause of stress in Australia[2]. In fact almost half of all Australian workers (48 per cent) are worried about their financial situation.

The Financial Fitness of Working Australians Survey 2015[3] found that 28 per cent of employees are considered “financially unfit”. This means they:

  • Can’t always meet their regular repayments
  • Carry some form of lifestyle debt (credit cards etc.)
  • Have limited or no insurance
  • Don’t have a financial plan

Apply this figure to a workforce of 100 people and that’s almost a third who are experiencing moderate to serious levels of financial stress.

It’s tempting to write these numbers off as younger employees who haven’t yet learned to handle their finances responsibly. However, research shows that even among those employees earning $100,000 or more, 20 per cent find it difficult to meet household expenses on time each month[4].

 

The cost of financial stress

Your employees’ financial stress is almost certainly costing your business – it’s just that you may not initially recognise it as the cause.  There are three primary ways financial stress impacts on your workforce:

Time Away from Work

Sorting out financial issues (i.e. dealing with collections agencies, appointments with financial institutions or debt counsellors) is generally something that needs to be done during business hours.

According to the MetLife Employee Benefits Trend report 2012, 25 per cent of employees aged 18 – 45 had taken time off work in the last 12 months the deal with a personal financial issue[5].

Stop for a second and picture the number of your employees that fall within in this age-group. A quarter of them has chucked the proverbial “sickie” at some point in the last year to deal with money dramas…and you’ve paid for it.

 

Impact of financial stress at work

Employees who are worried about their personal finances find it difficult to concentrate at work.

Reduced Productivity

Even if you’re employees are physically at work, their minds may not be. Employees who are worried about money find it difficult to leave these worries at home when they come to work.

In fact, 36 per cent of employees admit to spending up to three hours per week thinking about their financial situation during work hours, while a massive 26 per cent admits to spending more than three hours a week.

These hours lost to employee financial stress are costing your business in the form of decreased productivity.

The problem is so widespread that it’s estimated that Australian employers are losing approximately $60 billion a year in productivity to employees thinking about and dealing with financial issues during work hours[6].

 

Poor Performance

Financial stress can literally be toxic for employees and has been identified as a significant cause of underperformance in the workplace.

Studies have shown that employees who were experiencing personal financial difficulties are more likely to be candidates for presenteeism[7] – which occurs when employees are physically at work but because of illness, injury or anxiety are not able to function to their full potential.

This means at any given time up to a third of your workforce may be under-performing due to the physical and mental effects of anxiety about their financial situation.

 

What’s the Solution?

Employers can no longer afford to ignore the fact that financially stressed employees are costing them money through absenteeism, reduced productivity and under-performance. The question is: what can they do about it?

While Australian businesses have long recognised the value of investing in their employees’ mental and physical wellbeing, financial wellbeing is an area which has been severely overlooked.

Money may not buy your people happiness, but when you consider the power it has to influence their overall wellbeing it’s clear that helping your employees to achieve stable, secure financial lives will benefit your business as well as your staff.

Adding financial wellbeing to your existing employee wellbeing activities is the first step on the path to helping your employees reduce their financial stress and improving their overall wellbeing.

 

About MOVE Bank

MOVE Bank provides financial wellbeing programs to businesses in the rail, transport and logistics sectors. Our goal is to add value to your business by providing your employees with tools, knowledge and advice to help them build secure a future and achieve their financial goals.

Contact Rebecca Beling at MOVE Bank on 07 3329 7806 or by email to find out how we can help you provide a tailored financial wellbeing program to your employees at no cost to your business.

[1] http://www.safeworkaustralia.gov.au/sites/SWA/media-events/media-releases/Documents/2013%20Media%20Releases/MR08042013-Mental-Stress-Cost-Australian-Businesses.pdf
[2] http://www.psychology.org.au/Assets/Files/2014-APS-NPW-Survey-WEB-reduced.pdf
[3] https://s3.mapmyplan.com.au/pdf/MMP-Financial-Index-Report.pdf, p.8
[4] https://www.pwc.com/us/en/private-company-services/publications/assets/pwc-employee-financial-wellness-survey-2015.pdf, p.8
[5] http://benefitcommunications.com/upload/downloads/MetLife_10-Annual-EBTS.pdf
[6] Map My Plan, “Financial fitness of working Australians, November 2015”, https://s3.mapmyplan.com.au/pdf/MMP-Financial-Index-Report.pdf, p.17
[7]The Work Foundation “Why do employees come to work when ill?” http://www.theworkfoundation.com/Assets/Docs/AXA%20event/FINAL%20Why%20do%20employees%20come%20to%20work%20when%20ill.pdf