The spectre of financial stress is wreaking more havoc than ever among the Australian workforce and crippling productivity levels in its wake. Way back when, in 2015, when Map My Plan commissioned a report on the state of financial wellbeing in Australia, it found personal finance issues topped the list of leading causes of stress.
Previously, PwC’s 2016 Employee Financial Wellness Survey found that financial stress was affecting 52% of employees. Alarmingly, they also called out Millennials as being in worse shape financially than their older counterparts.
To get to the bottom of the huge cost financial stress can have on your business, let’s start at the beginning.
What is financial stress?
Financial stress is a widespread experience not just in Australia but across the world. According to the American Psychological Association (APA), 72 per cent of Americans are stressed about money at least occasionally and 22 per cent feel extremely stressed about their finances.
Financial stress is caused when you are worried or anxious about another related to money. It can cause persistent negative thoughts, feelings of fear, worry or regret related to your finances.
Have you ever had a time that you’ve been stressed because of money? You probably have. Whether it’s from small things, like that time you lost your wallet, to larger ones, like when a medical emergency destroyed your credit.
Financial Stress for Millennials
Looking again at PwC’s 2016 Employee Financial Wellness Survey, 64% of Millennials are stressed about their finances. Almost half of them (46%) find it difficult to meet their household expenses on time each month. And 37% say that issues with personal finances are a distraction at work.
In yet another study, according to AMP’s 2016 Financial Wellness report, one in four Australian workers are experiencing financial stress. And, personal financial stress isn’t something they leave at home.
What does financial stress mean for your business?
Their research shows that financially stressed employees lose on average 6.9 hours of productive time per week. Plus, they take off about four days a year because of this stress. AMP estimates the cost to employers is in the order of $47 billion per annum in lost revenue.
Clearly, financial stress is a big workplace issue. And it’s something that all employers need to tackle. As an employer, you’re the source of your employees’ wealth, so it makes sense to provide tools and services to help them manage it.
Not only is it the right thing to do, but as an employer, you’ll reap the rewards. As Ken E Allison, Partner & National Practice Leader at PwC says in their report:
“It is important for employers to show that they care about employee financial well-being as this will likely impact retention, recruitment and productivity, particularly for Millennials and Gen X. With retirement savings worryingly low, now is the time for employers to put effective financial wellness programs into place that focus holistically on the financial well-being of employees and drive behavioural change.”
So, it’s important that you focus on helping your employees get on a much firmer financial footing by giving them access to financial tools and education. Whether your focus on budgeting, debt management, financial planning or saving for life stages, it’s a must have part of any employee benefits program in 2017.
What do you do next?
Good question! Financial wellbeing, as a benefit, reduces personal financial distress, enhances employee wellbeing, and leads to happier, healthier staff. You’ll also benefit from less personally stressed more engaged employees. Learn more about initiatives you can take for your employees with the How To Reap The Rewards Of Employee Wellness guide.
Employment Hero offers a cloud-based HR, payroll, and employee benefits system for small to medium sized businesses. Your employees will have access to our marketplace of specially curated employee benefits from Australia’s leading insurance companies. Request a demo today.