Why Employee Financial Wellness Matters for Business

In today's fast-paced and competitive business world, companies are constantly striving to find new and innovative ways to attract and retain top talent. One often-overlooked aspect of employee satisfaction is financial wellness. Employee financial wellness refers to an individual's overall financial health, including their ability to manage and save money, pay off debts, and plan for their future. Financial wellness plays an integral role in an employee's overall well-being, and it can have a significant impact on their job performance, productivity, and loyalty to the company. In this article, we will explore why employee financial wellness matters for a business and the benefits it can bring.

Impacts on Business Revenue and Output

Employee financial wellbeing can have a significant impact on business revenue and output. A 2021 survey found lost motivation and productivity coupled with employee distraction is estimated to have cost businesses and the economy $66.8 billion, more than double the $30.9 billion estimated in 2020. When employees are financially stressed, they may be less productive, take more time off, and be more prone to errors and accidents that can negatively impact the quality of their work. In addition, financial stress can lead to higher levels of turnover, which can be costly for businesses in terms of recruitment, training, and lost productivity.

Conversely, when employees have financial stability, they are likely to be more focused, engaged, and committed to their work, leading to higher productivity and better business outcomes. Furthermore, investing in financial wellness programs can reduce a business’ healthcare costs and absenteeism as well as increase employee retention, all of which can positively impact the bottom line.

Loss of Productivity

‍When employees are struggling financially, they may experience high levels of stress, anxiety, and distraction that can negatively affect their job performance. Financial stress can also lead to absenteeism, presenteeism (being physically present but not fully engaged), and employee turnover, all of which can further impact productivity. A recent survey of the U.S workforce found that financial distress led to each employee in a business losing 11.4 hours of productivity per week.

Financially secure employees are likely to be more focused, motivated, and engaged in their work, leading to increased productivity and better job performance. By prioritising employee financial well-being, businesses can create a more productive and engaged workforce, leading to improved business outcomes and increased revenues and success.

Reduced Stress Levels

Financial stress is a significant problem that can impact an employee's performance and well-being. It is no secret that financial difficulties can lead to high levels of stress, which can negatively impact an employee's health, relationships, and job performance. According to a recent U.S survey, 61% of employees are stressed about their finances and 43% reported that financial worries affected their work performance.

By promoting financial wellness, companies can help alleviate some of this stress by providing their employees with the tools and resources they need to manage their finances more effectively. This, in turn, can lead to improved job satisfaction and increased productivity, as employees can focus on their work without the distraction of financial worries.

Improved Employee Engagement

Employee engagement is crucial for the success of any business. Engaged employees are more committed to their work, more productive, and more likely to go above and beyond to achieve their goals. On the other hand, disengaged employees can have a significant negative impact on a company's bottom line.

Financial wellness can have a significant impact on employee engagement. A recent study found that employees who reported high levels of financial well-being were more engaged in their work, had higher job satisfaction, and were more likely to stay with their current employer. In turn, reducing financial wellbeing stress can improve customer service quality and enhance creativity and innovation. By prioritising financial wellness, companies can create a more engaged and motivated workforce, which can have a positive impact on productivity, innovation, and overall success.

Enhanced Company Reputation

In today's socially conscious business world, consumers and employees alike are increasingly interested in companies that prioritize social responsibility and ethical business practices. By prioritising employee financial wellness, companies can enhance their reputation as socially responsible employers and attract top talent who share their values. Furthermore, companies that invest in financial wellness programs can differentiate themselves from their competitors and position themselves as industry leaders. This can lead to increased employee loyalty and end customer satisfaction through happier employees.

Conclusion

In summary, employee financial wellbeing is crucial for businesses looking to create a productive, engaged, and healthy workforce. Financial stress can negatively impact employee performance, productivity, and job satisfaction, leading to increased absenteeism, presenteeism, and turnover. Conversely, financially secure employees are likely to be more focused, motivated, and committed to their work, leading to improved business outcomes and increased revenue.

By investing in financial wellness programs and providing employees with resources and support to improve their financial wellbeing, businesses can create a more positive work environment, reduce healthcare costs, and increase employee retention.

Ultimately, prioritising employee financial wellbeing is not only the right thing to do but is also a smart business decision that can help drive success and growth in today's competitive business landscape.

Resources

https://www.ngssuper.com.au/files/articles/banners/2022/03/financial-wellbeing.pdf
https://www.forbes.com.au/news/leadership/how-well-are-employers-supporting-the-financial-wellbeing-of-their-staff/
https://www.afr.com/wealth/personal-finance/
https://www.afr.com/wealth/personal-finance/financial-stress-doubles-as-rate-rises-inflation-bite-20220906-p5bfua