Poor Financial Wellness Costs Employers 14% of their Total Payroll

Jul 17, 2019
| Michael Altiero
Poor Financial Wellness Costs Employers

Recent years have seen a greater emphasis by employers and employees on addressing workplace wellness. Companies have added new benefits and office perks, such as flexible working arrangements and employee assistance programs (EAPS), to help address employee wellbeing.

But financial stress and wellness continues to grow among today’s workforce, causing issues for workers and employers alike.

Salary Finance recently released the results of their 2019 The Employer’s Guide to Financial Wellness report which unveiled a wide-range of statistics on this trend that directly impact companies, including small businesses.
 

The Impact of Financial Stress

Salary Finance’s survey was taken by over 10,000 United States employees across 26 sectors. While we’ll only be covering select findings in this blog, you can click the link above to download and view the entire report.

Respondents were asked if they were worried about 4 areas of their lives – relationships, health, career, and finances. The report compared the results of men vs. women as well as by age (25-34 vs. 55-64). In both comparisons, each group listed finances as by far the biggest worry in their lives:
 
  • 41% men; 51% women
  • 53% 25-34; 32% 55-64

Another interesting finding broke down financial worries by job title by percentage:
 
  • Trainee – 59%
  • Team member – 50%
  • Supervisor – 47%
  • Manager – 41%
  • Department head – 32%
  • Vice President – 43%
  • President – 45%
  • C-Level – 50%

Next, the survey highlights the negative impacts of financial wellness on mental health. The results showed that workers who have financial worries were 3.4 times more likely to be anxious or prone to panic attacks and 4 times more likely to be depresses and find it difficult to carry on with life.

Some additional details showed that those with financial worries are:
 
  • 8.1 times more likely to have sleepless nights
  • 5.8 times more likely not finish work on time
  • 4.9 times more likely to see their work quality decrease
  • 4.3 times more likely to have troubled relationships with co-workers
 

How does Poor Financial Wellness Impact Employers?

Another important finding, and one of the many reasons why employers are trying to address financial wellness, found that employees are 2.2 times more likely to look for new opportunities if they are experiencing money/financial worries.

Based on this statistic and data from other studies, poor financial wellness costs employers an average of 11% to 14% of their total payroll expense.
 
  • 48% of workers are worries about money
  • 3.4 hours are lost each week on money worries
  • 1.1 additional sick days are used each year financial stress (per employee)
  • 23 to 31 productive workdays are lost each year
  • Employers spend additional costs on recruiting and training employees

Last, when it comes to the role employers have in addressing the financial wellness of the workforce, 68% of employees believe their employer cares about them and their wellness.

Additionally, 79% trust their employer to keep their personal financial information private from co-workers and managers.
 

Employees Expect Their Employer to Help with Financial Stress and Wellness

Studies like this show just how important all areas of wellness (mental, physical, financial, and emotional) are to employees today. It also illustrates the critical role placed on employers to provide the employee benefits and perks necessary to help combat this growing trend.

Failing to do so could lead to negative consequences for both an employer and its workforce.

But providing the tools and resources to help with employee wellness can go a long way to boosting recruiting, retention, morale, and company culture – a winning formula for business success and growth!

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