American workers are dealing with financial stress, and it may have a negative effect on their work. In fact, almost 60 percent of employees say financial issues are their top cause of stress, and 67 percent say dealing with their financial situation is stressful, according to a PwC survey.
Financial stress isn’t just affecting your employees’ health and relationships; it may also be affecting your company’s productivity. Thirty-five percent of employees say their personal financial matters have caused them to be distracted at work, according to the PwC study.
If reliable, productive employees are essential to your company’s success, it’s time to understand what’s stressing them out and how you can help.
Why employees feel stressed
Although unemployment is low, most American workers haven’t had a meaningful raise in decades. After accounting for inflation, today’s average wage has about the same purchasing power as it did 40 years ago, according to Pew Research.
As a result, many employees’ paychecks are consumed by essentials such as healthcare, rent, fuel, student loans, food, utilities and car. There’s little, if any, left over for nonessentials, unexpected expenses or building savings. That means many employees rely on credit cards or other forms of debt to cover emergencies such as home and car repairs and unexpected medical expenses.
While wages remain stagnant, the costs of achieving basic financial goals, such as purchasing a home and earning a college degree, are rising. For instance, the average cost of tuition at a four-year public university has increased 213 percent since 1988, according to CNBC, and the class of 2018 alone, 69% of college students took out student loans, and they graduated with an average debt of $29,800, including both private and federal debt.
Many goals out of reach
For many employees, saving and achieving financial goals such as home ownership, building an emergency fund, saving for a vacation are simply out of reach. For example, almost 90 percent of Millennials say they want to buy a home, but 67 percent will have to wait two decades to do it, in order to save enough for a down payment, according to a recent survey. One major reason they can’t save is that the average 20- to 30-year-old pays $351 per month in student loan debt.
With more people living paycheck to paycheck, it is hard to keep up with all expenses. Many people are now spending more on their student loans than essentials like healthcare, fuel, utilities and food.
How financial stress affects employers
Not only are employees missing out on achieving financial goals and life milestones, they’re also living with increased stress. And stressed employees miss more work and are less productive, which negatively affects their employers. One study showed that 50 percent of full-time U.S. employees between the ages of 18 and 70 said they lose between one and five hours of work time each week due to stress.
How employers can help
Employers can help ease the burdens of financial stress for their employees—and boost their own bottom lines—by tailoring unique benefits programs to ease employees’ financial worries. For instance, increasing numbers of employees are offering student loan repayment benefits or student loan refinancing to help ease the burdens of student loans. Employers can also assuage employees’ worries about paying for their children’s education by contributing to their 529 accounts.
Employers can take action by offering new benefits that address financial concerns, as well as financial wellness programs that provide education and planning so employees can develop stronger financial skills and plans. Look for programs that harness technology and are available via mobile devices, so they’re more accessible to employees and easier to use. By taking steps to soothe employees’ financial stress, you can boost their productivity and their loyalty.