Your staff is the engine that runs your organization. To run smoothly, you need a well-oiled machine -- one where your employees show focus, energy and engagement.
But, when something is troubling your employees, it can stop your engine dead in its tracks.
There is one addressable, yet widespread, issue that can hinder workflow at your organization. The major stressor, according to the Consumer Finance Protection Bureau, is money and financial wellness for your employees.
A recent CareerBuilder survey finds nearly 80% of Americans are living paycheck-to-paycheck, and roughly 50% of people can’t take care of a $400 emergency without borrowing money from someone or dipping into their 401(k).
Many employers have begun to research and implement financial wellness programs to help alleviate this common stress. And, according to Schwab Retirement Plan Services, 93% of millennials polled would take advantage of a financial wellness program at work. That is a tremendous number.
Employees are asking for it, but why should employers listen?
1. Financial wellness improves productivity
Millennials who care about financial wellness programs are proactively finding ways to battle debts. 24% of millennials cite student loan debt as the primary cause of their financial stress. 35% of millennials also say that financial stress has affected their job performance.
Millennials aren’t the only demographic impacted by financial stress.
According to a study conducted by Financial Finesse in 2013, 66% of the 12,000 respondents they polled said they felt stress because of their day-to-day personal finances and 60% expressed concern about meeting future financial goals.
Women age 30 to 44 with household income below $60,000 and dependent children were identified as the most worried group.
This time spent worrying diminishes the focus of your employees. Without a singular attention at work, productivity decreases and mistakes are made. This level of disengagement can mean your employees are “sleepwalking” through their day. They may be at work but they aren’t present. This has a direct impact on your product’s quality and therefore your bottom line.
A report by Health Advocate found that stress negatively impacts the economy by $300 billion each year.
2. Diminishes absenteeism
It’s difficult to leave financial stress at home. In most cases, your employees are bringing it into the workplace. As a result, absenteeism ensues. Absenteeism doesn’t simply include when employees miss work, it also covers when someone is:
- Late to work
- Leaves early
- Takes long breaks
Financial stress can also lead to health problems which can both affect the mental and physical quality of life for your employees and lead to more days missed at work.
As many as 10% of U.S. employees who miss work due to on-the-job stress may be absent from work for 21 days or more a month. Almost another quarter may not show up on the job due to stress for as many as 20 days a month.
The company Circadian estimates that unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,650 each year for salaried employees.
3. Reduces attrition
Studies show that financial stress causes 40% of employee turnover.
Employees that don’t feel secure, financially, are easily poached by competition. If a position offers a higher paycheck, even just one dollar more an hour, you can bet your workers will accept.
In a tight labor market, the cost of replacing an employee can be a major hit to your bottom line.
Financial stress can touch all workers, but our lower-income employees can be particularly susceptible. The stress of impending bills and late fees because of small shortfalls in their budgets can limit productivity, engagement, and longevity.
Without intervention, employees can remain stuck in bad financial patterns, or even make problems worse. That’s where employers can step in, and help their workforce overcome their individual financial struggles.
The trend of employee financial wellness began in 2017 and continues to pick up steam in 2018. It just makes wise business sense.
How can DailyPay help?
DailyPay helps employers address financial stress in a proactive way. By allowing your employees to access their earned but unpaid wages as often as they need, you are providing flexibility for short-term cash. This financial wellness program helps your employees live their daily lives, cover unexpected expenses, and provide savings from late fees or predatory loans.