It’s a new year, but many employees are left facing the same financial problems, like high living costs and fears of rising inflation. For HR leaders, ignoring this reality is a critical risk.
Employee financial stress is likely already costing your business. ZayZoon’s latest State of Employee Financial Wellness Report found that over half of employees experience daily financial stress — and 63% of employers say this stress negatively impacts job performance.
Productivity and engagement suffer when employees feel financially strained. And while HR can’t stop economic uncertainty, it can offer resources to help employees weather the storm.
Financial wellness programs provide concrete support for employees — from budgeting tips to better cash flow — freeing up mental space to focus on work. But to see lasting impacts on workplace morale and productivity, it’s essential to commit to financial education for the long haul.
The hidden cost of employee financial stress
Our recent insights from 5,000 employees and 500 HR professionals on employee financial stress make one thing clear — there’s no time for inaction.
More than half of employers (61%) say their employees have experienced at least one severe situation — like eviction or personal bankruptcy — due to financial gaps. And 38% say they’ve seen employees organize a fundraiser for a coworker in need.
On the employee side, 52% report feeling financially stressed daily or multiple times per day. To be expected, since 73% of employees say basic necessities, from bills to groceries, are top financial stressors.
Employers and employees agree this strain shows up at work, but to different degrees. More than half of employers (65%) say financial stress affects focus, along with morale (51%) and needing time away from work (30%). Comparatively, only 43% of employees believe it impacts their focus, and even fewer say it influences morale (22%) or time off (11%).
The gap between employer observations and employee self-reports underscores the challenge of openly addressing financial struggles. Still, no business wants to face the fallout from lower engagement and chronic absenteeism. And every employee deserves a workplace that prioritizes their well-being.
To tackle an issue as complex — and stigmatized — as financial well-being, HR needs a proactive approach focused on holistic support.
Build a strong financial wellness culture in your workplace
Financial stress can feel highly personal, which means many employees struggle silently. They may be reluctant to seek help, or just unsure of what help to ask for. Knowing this, every workplace needs a financial wellness program that meets employees where they are.
1.Don’t ignore the issue — get clear on employee challenges.
First, make sure employees have a safe space to talk about what financial support they need most. Anonymous surveys or confidential one-to-one office hours can help employees open up and feel comfortable sharing their concerns.
For example, our survey revealed that nearly 30% of employees end each month with a negative balance of $600 in their bank accounts — and that’s just to cover required expenses. If it’s clear employees are feeling the pinch between pay cycles, urgent intervention should be a priority.
In this scenario, a tool like Earned Wage Access (EWA) can offer immediate relief, letting employees access a portion of their earned wages before their regular payday, without needing to contact their manager for a pay advance.
With concrete data at the outset, you can hone in on financial wellness resources that will have the greatest impact on your employees.
2.Commit to ongoing financial education.
A common misconception about financial wellness programs is that they’re a one-and-done deal. You roll out a new tool and employees are ready to go — but that’s far from the truth
First, employees need specific guidance on how financial wellness programs can impact their day-to-day experience. Given that an estimated 12 million Americans take out payday loans each year, a clear explanation of how a tool like EWA helps manage unexpected expenses can prevent employees from falling into the trap of predatory lending.
At the same time, create no-judgment spaces for employees to learn about topics like budgeting, saving or debt management. Optional seminars on retirement planning or building an emergency fund can empower employees to break out of the paycheck-to-paycheck cycle and strive for long-term financial goals.
Our research found that 81% of employees think their employer should invest in their financial wellness and literacy. To achieve this, show employees you’re committed to supporting their financial wellness, and not just checking a box.
3.Measure the impact of financial wellness offerings over time
To set your financial wellness program up for maximum impact, make a proactive plan to track metrics for success. Survey employees monthly, quarterly or annually on their experiences with new financial wellness benefits.
A mix of quantitative details (like frequency of use) and qualitative feedback on how the tools meet employees’ unique financial needs will round out your insights. You should also draw feedback from managers about any changes they’re seeing in team morale. Most importantly, be prepared to adjust your program based on feedback.
For instance, managers might report that new financial wellness tools are boosting performance. In fact, 63% of workplaces see increased productivity after adopting EWA. But employee surveys might reveal that they need additional guidance tailored to student loan repayment, or more instruction on how to use available platforms.
An open dialogue improves alignment. While you use employee insights to adjust support, employees can rest assured they’ll have the right resources to manage their financial health.
Financial stress demands tailored support
The impact of financial stress on the workplace is real, and it’s already here. Fortunately, employers have the opportunity to respond with the right financial wellness benefits.
A financial wellness program that offers holistic support and education — and adapts based on employees’ most pressing needs — sets your workplace apart and creates an environment where talent can thrive.
