Financial stress can be a significant contributor to reduced productivity in the workplace, and it continues to be a prevalent concern for many Canadians. In fact, financial stress is ranked as the No. 1 source of stress for Canadians, according to the Canadian Payroll Association (CPA).
In addition, 43 per cent of workers reported being so financially stressed that their performance at work suffers as a result.
How Employee Financial Stress Impacts Your Organization
When employees are so stressed that their work performance suffers, your organization suffers as well, making it difficult to reach its fullest potential and meet goals.
Financial stress contributes to lowered workplace performance in three primary areas:
- Increased absenteeism—Financially stressed employees miss twice the number of work days per year, as compared to their unstressed peers. This can lead to failing production goals or stretching employee resources to cover for the absent workers, which in turn can lead to more stressed employees.
- Lower productivity—Financially stressed employees are also less productive when they are present at work, on average spending more than three hours per week distracted by their personal finances. This distraction directly impacts the productivity of the organization as a whole, potentially leading to missed deadlines and overlooked errors.
- Increased health care costs—Though stress may seem solely like a mental state, it can manifest itself physically through heart disease, migraines, obesity and even accelerated aging. Furthermore, financially stressed employees are more likely to avoid health care visits due to the costs, resulting in higher health care costs later on when conditions worsen and they are forced to seek medical help.
How You Can Help Reduce Employee Stress
According to the CPA, 78 per cent of workers are interested in having financial education available in the workplace, such as how to budget and save for the future. By providing such options, you will not only help to reduce financial stress and increase workplace performance, but also promote employee retention and make your organization more attractive to new employees.
Organizations can also directly help employees save for the future by offering a workplace savings program where the organization encourages savings by matching contributions up to a certain amount. Furthermore, developing clear career paths for employees, allowing for flexible work hours and adjusting compensation plans can all contribute to reducing employee stress and its impact on workplace performance.
Most people define financial wellness as a form of freedom. In order to encourage participation, it’s important to stress that the goal of financial wellness programs is to help employees to become free from stress and financial restrictions. Additionally, while it may seem wise to simplify financial wellness programs by instructing employees on exactly what to do or requiring specific actions in order to benefit from them, this can lead to more stress as their sense of freedom is diminished. Instead, offer a variety of choices for financial decisions and provide positive feedback to reinforce good decisions.