Employee Financial Stress and its Impact on Your Company

Eighty-five percent of employees report feeling at least some financial stress, according to a survey released by Financial Finesse, a financial education firm. The survey, conducted in 2014, noted that almost one-quarter (23 percent) of employees felt “high or overwhelming” financial stress.

The survey tracked the demographics of financial stress, and found that more than half (55 percent) of women between the ages of 30 and 55 with minor children and incomes below $60,000 annually are overwhelmingly stressed about their finances.

Red Flag

Any employer that has employees who fit this demographic should be concerned about these numbers. According to the Consumer Financial Protection Bureau, financial stress takes a high toll on employees. People who report high levels of financial stress are much more likely to report that they suffer from headaches, severe depression, anxiety, and even digestive tract issues. High financial stress also correlates with trouble sleeping and concentrating.

Financial stress generates a clear cost for employers. Financially anxious employees are less productive and generate higher health costs. A 2012 report in Health Affairs noted that employees that reported high stress cost $413 more annually on average than other workers. In comparison, smoking increased health care costs by an average of $587 annually.

Financial Confidence

Increasingly, companies are providing financial skills training and financial counseling to employees to help them achieve financial wellness. Financial wellness programs increase employees’ engagement on the job and improve their productivity. Effective programs are personalized and focused on individual employees, providing guidance for their specific financial needs. Strong programs are also holistic, encompassing every part of an employee’s financial picture, from debt management to estate planning, so the program applies to every employee, not just specific demographics. And the program should integrate all the benefits a company provides, so it’s seamless to employees.

The Participant Effect^SM can help your employees achieve financial wellness and confidence, through a comprehensive program that provides strategies based on each employee’s needs. For more information about employee financial wellness and The Participant Effect, call 866-625-4611.

Tracking Number: 1-410748

This information was developed as a general guide to educate plan sponsors but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, the plan sponsor will be in compliance with ERISA regulations.