The Impact of Financial Wellness on Productivity and Retention
March 24, 2023
Written by – Zeynep Ertas, SEB Marketing team
Employers have become increasingly aware of the detrimental effects of financial stress on the health and well-being of their employees, highlighting the critical role financial wellness plays in supporting a positive work environment. According to a study by Enriched Academy, approximately 58% of employees are stressed about their finances, which can negatively affect productivity and retention.
The impact of financial stress on productivity is significant. In a recent study conducted by Mercer, it was found that employees who suffer from economic anxiety are more likely to be distracted at work, spend more time addressing financial concerns during work hours, and miss work due to stress-related factors. A recent survey by the National Payroll Institute, as reported by Benefits Canada, states that employees worrying about their finances on the job will have cost Canadian $40 billion in lost productivity in 2022 alone.
Employee financial wellness can be improved by providing education and resources on financial literacy. A simple budget, tracking expenses, and setting up an emergency fund are some tips suggested by The Enriched Academy. As a result, employees are not only able to manage their finances better, but they are also able to reduce their stress levels and increase their productivity.
Additionally, providing financial wellness programs can also help employers retain employees. Surveys conducted by the Financial Consumer Agency of Canada show that 47% of employees participating in financial wellness programs are likely to stay with their company. It may be because financially stable employees leave their jobs less frequently for economic reasons.
The impact of financial wellness on retention rates is further supported by MDPI.com that found that employees who receive financial education and guidance are more likely to remain with their employer. In addition to helping employees better understand their finances, financial education also helps reduce financial stress. They note that employees who are financially secure are less likely to leave their current job for better pay or benefits.
Employee productivity and retention are directly impacted by financial wellness, which is a crucial aspect of overall wellness. While many employers are already aware of the impact of financial stress on their employees, it remains crucial for them to continuously prioritize financial wellness and provide necessary resources and education to support their employees’ financial well-being. By doing so, employers can not only improve the financial health of their employees but also reduce the risks associated with employee turnover that impacts their bottom line.