What is financial stress?
Let us begin by understanding what financial stress is. The constant worry about meeting financial goals refers to financial stress on employees. A particular employee may be constantly worried about his inability to pay his home loan EMIs or pay his child’s upcoming school admission fee. These worries tie him down and stay with him 24/7. So even when he is at work, his mind is preoccupied and this hampers his work performance. Financial stress on employees is directly linked with lower productivity and this is why you, as the employer, should be very concerned about it.
Let’s talk numbers:
- 16% of the people worried about money for more than 20 hours every month contributing to a dip in productivity and increased absenteeism at work.
- 37% claimed that their problems were heavily distracting them at work.
- 68% of the employees were under financial stress.
- 72% of employees were clueless about how to save for retirement, highlighting the need for financial awareness.
So, they end up either with health issues or leave the company or are less engaged. Thus, financial or money matters are a major cause of stress in your employee’ life.
What causes financial stress on employees?
There are quite a few factors that cause financial stress. Some of them include:
It is very common to find families drowning in debt these days. People take too many loans at once. It is not unusual to see someone opt for a home loan even before they pay off their student loan. In addition, they also have credit card bills to clear and so on. Being in a lot of debt is the main cause of financial stress on employees. Oftentimes, your employees’ salaries may not be enough to clear their monthly dues and this puts them into severe financial stress.
Young executives these days aren’t always disciplined about their savings. They are impulsive spenders who end up saving only a small amount of money. The lack of savings can be another cause of financial stress on employees. When a person has a corpus of saved money, he is more relaxed and vice-versa.
Also read: How to help your employees save money?
Unstable financial markets
Another common modern trend is investing in the stock markets. Young employees like taking risks and invest a huge chunk of their earnings in the financial markets. However, when the markets become volatile and unstable, they stand to lose all their invested money. This causes tremendous financial stress and your employees are unable to take their minds off it.
Education is the key to success and everyone knows it. While all your employees have the needed degrees and diplomas, not everyone may hold the highest qualification needed to swiftly climb up the career ladder. This causes tension and worries among the lesser qualified workforce as they worry about promotions and future earnings due to their insufficient education qualifications.
These are some of the main factors that cause financial stress on employees.
What is the impact of financial stress on employees?
Now that you know what financial stress on employees is and the reasons behind it, let us see how it impacts your employees:
You cannot expect a person to simply keep his problems at home and walk into your office every day with a smiling face. A person faced with financial stress will remain stressed round the clock. This will lead to loss of sleep. Other impacts may include excessive consumption of alcohol, dependence on drugs, etc. These may lead to disruptions in your employee’s lifestyle and he may end up missing office regularly. For instance, a financially stressed employee who cannot get proper sleep consumes a sleeping pill and then sleeps till noon the following day. This prevents him from being at his workplace at 8 AM. Increased absenteeism is one of the main and most hard-hitting impacts of financial stress that causes troubles for your employees as well as your organization.
2. Lower productivity
Whether he comes to work every day or stays at home most days a week, an employee who suffers from financial stress will automatically be less productive. This is because he is constantly burdened with his monetary worries and he will spend a lot of his working hours doing research on how he can sort out his troubles. He will not be able to give in his best when his mind is boggled with such deep stress.
3. Severe health problems
Financial stress causes a lot of harm to not just mental health, but also to the physical health of a person. This is quite clear because the mind and the body are very closely related. Your employee who is financially stressed may face the following challenges:
- Hypertension – Hypertension is the increase in a person’s blood pressure levels. This has some very serious health impacts and can also lead to an individual’s death. Financial stress causes hypertension in many people as the heightened stress levels make it impossible for the person to maintain the desired blood pressure levels.
- Heart ailments – Heart ailments are also very common in those who suffer from financial stress. To maintain proper heart health, a person needs to be stress-free. The anxiety that stems out of stress can lead to cardiac disorders which can also prove to be fatal in the long run.
- Headaches – Tension headaches are one of the most common types of headaches that many people suffer from. Since financial stress is one of the most severe forms of stress and tension, these headaches affect the people very severely, causing throbbing pain, numbness, nausea, etc.
- Weight management problems – Sadly, your employees who are going through financial stress, may end up binge eating all the time and become overweight due to it. Obesity poses many threats to a person’s overall wellbeing and should be avoided at all costs.
- Sleep disorders – Stress is directly related to sleep disorders. Unless your mind is clear and calm, you will find it very difficult to fall asleep. This is why your employees who have financial stress have so many sleeping disorders.
- Memory loss – Stress fogs the mind and this causes temporary (permanent, in some cases) memory loss. This is again a huge problem and it is something that stems out of financial stress.
As you can see, these are serious health problems that can make your employees very ill and further hamper their work-performance.
4. Poor concentration
As mentioned above, a person who is stressed is always preoccupied with his own thoughts. This causes a shift in his focus and he is unable to concentrate on the job you have given him to do. This hampers his productivity. It can also lead to serious errors which can be harmful for your organisation.
5. Impact on work ethics
Getting into fights inside the office or being rude to fellow workers may not be things you would want to encourage at your firm. However, the employees who are tremendously stressed with their own finances may indulge in such activities. This will have a very negative impact on the overall ethics and mannerisms of the workforce and may bring in lots of ill-reputation to your company.
As is quite obvious from the points mentioned above, financial stress on employees is a real hindrance that impacts your employees and subsequently, impacts your and your organisation as well.
How can companies reduce financial stress on employees?
As a concerned employer, you need to review the situation and take control of it. If your employees are stressed, their performance, health and behavior will all begin to dip. As an employer who largely depends on his employees’ performance for profits, you need to take stock and help your employees to reduce their stress levels. Here are a few ways in which you can do so:
Be observant and empathetic
Start off by being more observant. Notice which employee seems more stressed, whose performance has been poor and who seems to be anxious and disturbed at all times. Be empathetic and address the issue with care. Do not reprimand the employee for dragging his personal problems into your office. Rather, assure him of your support so that he gets the much-needed confidence to proceed ahead.
Hire a counselor
It is very important for every organisation to have a therapist or mental health counselor present in the office premises. Each employee, irrespective of his designation, should have full access to the therapist to whom he can confide his problems in a confidential manner. The therapist can also greatly help in lowering the level of financial stress on employees and prevent further issues from taking place.
Have an employee assistance program
Have a helpline number where your employees can call in and discuss their issues at the most vulnerable of times. Many people may not be comfortable talking to a counselor about their problems face-to-face. An assistance program such as helpline number may be of great use to them as they can discuss their problems and get the best solutions thereafter.
Hire a financial advisor
It is an excellent idea for you to hire a financial advisor who can train your employees about financial management. From paying off EMIs on time to fruitful investments, the advisor can share many tips. This can go to a large extent to reduce the level of financial stress on employees. The advisor can be a full-time employee or a part-time resource, but all your employees should have free access to him at all times. This is one of the most effective measures you can, as an employer, take to reduce the financial stress on employees.
Offer flexible work options
Rather than being rigid about clock-in and clock-out times, offer flexible work options to your employees, especially those who are under financial stress. If the employee is on medication and cannot wake up in the morning, allow him to work from home as long as he finishes all the work assigned to him. The added tension of getting a late or absent mark at work will only further disturb his mental peace and he will get pulled deeper into the stressful situation he is fighting.
Offer health insurance
Stress and mental dis-balances are, unfortunately, a sad reality. Your employees suffer from it and this makes them mentally and physically unwell. However, the situation should never get out of hand. To ensure this, your employees need to get themselves checked by the best of healthcare practitioners and get the necessary assistance to overcome their health conditions. As an employer, you must offer sufficient health insurance with the help of which your employees can get the medical attention they need when afflicted by financial stress. This will help them to bounce out of the condition and resume their work in a free and healthy state of mind.
Koppr offers health insurance for employees.
Review the salary structure
If you notice almost every single employee in your office is financially stressed, you need to review the situation. Are you paying them too little? Try to go over the salary structure of each employee and see if any changes can be made. Do not be too generous here as you too have a business to run. Find a balance to make your employees less stressed while bringing home the profits too. Note here that this may only be applicable to small businesses that have a handful of employees. If you run a larger organisation with thousands of employees, you possibly cannot increase everyone’s pay! This will cause tremendous imbalance to the finances of the company and that won’t be helpful for anyone.
Be an employer who cares. Be an employer who is always there for the well-being of the employees. Follow these guidelines and you will become that employer in no time.
Koppr helps you bring financial wellness to your employees. Download the complete guide.
What benefits do the stress-busters offer?
If you have been wondering what actual and practical benefits the stress-busting mechanisms can offer, here are some answers for you:
Increase in productivity
The first benefit an employer like you, who offers support to the stressed employees, stands to get is a hike in productivity. As stated, you wholly depend on your workforce to get the job done. When all your employees are fit and healthy, they work better and you see a surge in the overall productivity.
Increase in profits
This is quite an obvious benefit – a well-performing workforce will drive in more profits for the organisation. When you have your employees working to their full capacity without making errors or losing focus, your profits are bound to increase.
An employer who takes care of his employees is always very popular and much sought after. This brings in a lot of good reputation to your organisation and clients and vendors look to get associated with you. This again helps your business to grow and the profits to rise.
Retention of talent
If your employees are happy with the support they get from you, they will work with you for longer periods of time. This will help to retain the talent that you recruited and trained. If the employees do not get the support or feel added pressure from the employer, they will not think twice before switching their jobs.
Positive work environment
And finally, offices that have a majority of mentally fit and relaxed employees have a better work environment. People are happier and the camaraderie is open for all to see. This drives in a lot of positivism into your office and keeps your workforce healthy and happy, leading to a spurt in their performance.
These are the main advantages you get when you take care of your employees and help them overcome the financial stress that pulls them down.
Get the complete guide to financial planning for your employees.
The final word
As you can clearly see from the points mentioned above, financial stress on employees is quite pertinent and it has some very damaging effects. As an employer, you therefore need to ensure your workers are as stress-free as possible. You may not be able to solve all their problems, but by following the tips mentioned above, you may help them quite a bit. Do what’s best for your employees and they will perform better, which in turn, will prove to be beneficial for your organisation as well.