Employers Are Losing Millions Of Dollars In Lost Productivity Because Employees are Financially Unwell

What kind of stress keeps you the most distracted at work? 

The state of the world, discord with a loved one, finances, a serious illness in the family…? 

The magnetic pull of stress on your mind is so strong, it easily overwhelms any other thoughts. This is why it feels impossible to focus at work when you’re worried, or unsettled about something in your life. Some challenges are too heavy to simply ‘shelf’, hide behind a smile, or hide behind a zoom call. 

We’ve been ringing the alarm bells that financial stress is one of the heaviest burdens distracting your people at work. And with rising inflation and economic uncertainty, conditions look to worsen. As an employer, you have a great opportunity to recognize the issue and give your employees the resources they need. 

So, why should you care?

Employees distracted by their finances lose several hours of productivity each month. They are worried about unexpected expenses, suffocating debt, and maintaining a budget in this insane inflationary environment.

According to a John Hancock study, “Another rising cost for employers: financial stress”, financial un-wellness costs employers $2,400 per employee per year, up 26% from pre-pandemic years. Think back on the heavy pull of stress that we mentioned and how long it can take your people out of the game.

This lack of productivity can really add up and be a substantial hit to your business’ bottom line. To put things in perspective:

• 100 employees = $240,000 in lost productivity
• 1,000 employees = $2,400,000 in lost productivity
• 10,000 employees = $24,000,000 in lost productivity

In addition to the distraction of worry, did you know that over a quarter of employees report spending three or more hours per month on their personal finances at work? 

We’ve seen enough in the evolving workplace to know that financial wellness solutions are not a ‘nice to have’. They’re a must have!

Oh, but we’ve got financial wellness covered!

Employers are doing pretty well when it comes to retirement, with over 60% of employers offering a 401(k). We’ve also seen gym reimbursements and mental wellness benefits creep into the workforce. But when it comes to addressing the top financial concerns of the majority of their employee base (managing suffocating debt and covering unexpected expenses), employers are coming up very short.

Now, business and HR leaders shouldn’t be fully faulted for this, as the programs in the current marketplace are limited and underdeliver. 

Although approximately 50% of employers are offering financial education, very few are offering ways to take action on the critical financial concerns that keep their employees up at night. At best, very few employers offer employees fragmented ways to save for emergency savings and manage student loans.

How Will You Fix Your Leaky Boat of Lost Productivity? 

If you want to give your employees financial peace of mind, and therefore be more productive at work, you have to give them the service the affluent get:

• Access to Financial Professionals
• Financial Education
• Help Client Take Action

The last item on the list cannot be underestimated.  Almost half of affluent clients, according to a Merrill Lynch Affluent Insights Survey, stated that having access to financial products (aka - a way to take action) was one of the top reasons they chose their financial advisor.

In summary, blanket financial education and retirement solutions will not help most of your employees. If you are seriously looking to decrease lost productivity AND help your employees achieve financial peace of mind, you have to do more. You’ll need to understand what they need and offer them the service models that have worked for decades for the affluent.

At Budge, we’re delivering a more cohesive program for everyday employees that has the same elements of an affluent service model: Financial Professional + Financial Education + Action Taking. For the critical 'Action Taking', we automate paycheck savings for the debt and savings goals that employees care most about, directly from their paycheck.

To learn more about Automating Paycheck Savings, visit us at www.budge.app.