Cost of Employee Financial Stress
Updated: Aug 2, 2019
Did you know 1 in 2 employees are dealing with financial stress?
While you think you might know your co-workers well, chances are they're probably dealing with or thinking about financial issues just like you.
According to MetLife's 2017 Employee Benefit Trends Report, 49% of employees have indicated they are either concerned or fearful about their current financial wellbeing.
From household purchases, to raising children, life can come at you pretty fast. Especially when you're not prepared for a financial emergency. And while employees have shared their concerns, more and more employees are looking to their employer for financial security.
Cost of Employee Financial Stress
As an employer, the state of employee financial stress can impact you significantly. Given that 46% of employees spend 3 or more hours a week thinking about financial issues as per research through the SHRM, this can amount to over 140 hours lost in employee productivity.
Now, let's do some math. I promise it'll be easy.
Employee's Annual Salary: $40,000 (or roughly $20 an hour)
Annual Productivity Hours Lost: 140 hours (3 hours a week)
Calculated Employee Value Lost: $2,800
While that's surprising, employee financial stress can also lead to an increase in employee absenteeism and turnover. Yes, turnover. Depending on the role, turnover can cost as much as 40-50% of the employee's salary or hourly rate. The variables of turnover costs can be broken down to the cost of hiring and training, and the opportunity cost for the vacant role.
For the financially stressed employee earning a $40,000 salary, this can amount to almost a $20,000 at a 50% turnover cost. Ouch! Why would financial stress lead to turnover or absenteeism at your workplace you might ask?
Well, there are a multitude of reasons. A financially stressed employee may opt to leave their employer simply because they've received a higher paying role elsewhere. In some instances, employees might not be able to make it to work because of financial setbacks. Financially stressed employees may even forgo or postpone healthcare related issues in efforts to save money.
Okay so employee financial stress can be expensive. Didn't we buy a super cool ping-pong table for employees and a beer tap? Don't we have an open dog or remote work policy? Isn't that supposed to promote employee wellbeing and relief from stress?
Not entirely, well maybe the dog policy. I've yet to see a person frown from seeing a dog, I mean c'mon!
Truth is workers are expecting more from their employers. The solution isn't getting companies directly involved with their employee's finances, but rather making it easy for companies to offer their employees financial benefits that actually matter.
Here at FloatMe, we do just that. FloatMe empowers employees with financial benefits such as early access to pay, protection from overdraft fees, and financial education.
The ability to advance a portion of your pay can provide peace of mind for employees with financial emergencies, and can prevent from expensive debts like late fees on bills, overdrafts, and even the use of terrible payday loans.
Partners who offer FloatMe to their workforce are now experiencing increases in employee productivity, happiness, and retention. It's time to provide employees with the financial benefits they actually want.
To learn more about offering FloatMe to your awesome employees, please check out our partner page here.
Cheers - FloatMe Team