American workers are dealing with heightened levels financial stress, and it may have a negative effect on their work. In fact, almost 60% of employees say financial issues are their top cause of stress, and 67% 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: 35% of employees say their personal financial matters have caused them to be distracted at work, according PwC.
Productive employees are essential to your company’s success, so it’s time to understand what’s stressing them out and how you can help.
Why employees feel stressed
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 Center.
As a result, many employees’ paychecks are consumed by essentials such as health care, rent, fuel, student loans, food, utilities, and car payments. There is little—if any—left over for nonessentials, unexpected expenses, or savings.
That means many employees rely on credit cards or other forms of debt to cover emergencies, from home and car repairs to unexpected medical expenses.
While wages remain stagnant, costs are rising for basic financial goals like purchasing a home or earning a college degree. For instance, the average cost of tuition at a four-year public university has increased 213% since 1988, according to CNBC—and 69% of college students in the class of 2019 took out student loans, graduating with an average debt of $29,900.
Many goals out of reach
For many employees, saving and achieving financial goals such as home ownership, building an emergency fund, or saving for a vacation are simply out of reach. For example, almost 90% of Millennials say they want to buy a home, but 67% will have to wait two decades to save enough for a down payment, according to a 2018 survey. One major reason they can’t save is that the average 20- to 30-year-old pays $393 per month in student loan debt.
With more people living paycheck to paycheck, it’s hard to keep up with total expenses. Many people now spend more on their student loans than essentials like health care, 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% of full-time US employees aged 18–70 said they lose between 1–5 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 potentially boost the success of their companies—by tailoring unique benefits programs to ease employees’ financial worries. For instance, more employers are offering student loan repayment benefits or student loan refinancing to help ease the burdens of student loans. Companies can also help ease 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 reduce employees’ financial stress, you can help boost their productivity and their loyalty.
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