Employee Financial Stress: A Complete Guide

Financial stress is a very real neurological and biological response to one of the most common “threats” of modern life – and that is financial insecurity and instability.

A centuries-old bootstrap narrative has led us to believe that the financial hardship and mental and physical wellbeing of the individual only has negative consequences for the individual themself. But as economists will tell you, as well as anyone who’s ever managed a less-than perfect team, when one employee is suffering, the impact can be felt across all levels of a company. 

Monetary hardship and instability is one of the most common causes of workforce stress today, especially in the continued wake of the COVID-19 pandemic, which served to aggravate pre-existing problems relating to financial literacy, including budgeting, saving, and credit management. And employee stress of any kind can cause significant problems for the business itself. The time is now to help your workforce out of their financial woes – for the benefit of all. 

What is financial stress?

On a medical level, stress is caused by the release of neurotransmitters adrenaline and norepinephrine in the brain, which activates the body’s fight-or-flight response in the face of an imminent threat. 

This process – way back when – served to keep us safe from predators or other dangers which posed an immediate threat to our bodily health. In the modern context, day-to-day threats are less emergent, and cause stress over the long-term which nevertheless triggers a similar response in our neural tissue. When our bodies are exposed to these chemicals over the long term, it can take a significant toll on both our physical and mental health. 

So, financial stress is a very real neurological and biological response to one of the most common “threats” of modern life – and that is financial insecurity and instability. 

What are the symptoms of financial stress?

Financial stress affects the body, mind, and performance of your workforce experiencing financial strain. Recognizable symptoms of financial stress can include:

  • Trouble concentrating at work.
  • Increased absenteeism on the part of the individual or the team as a whole.
  • Simple mistakes made on-the-job due to burnout, exhaustion, and other stress effects.
  • Medical symptoms like high blood pressure, insomnia, and headaches.
  • Interpersonal problems between coworkers, managers and direct reports, and employees and their friends and family members outside of work.
  • Decreased performance and productivity on the part of the individual or the team as a whole.

The symptoms of financially-induced stress share markers with generalized stress, and it’s important to survey your employees to determine the cause so you can maneuver benefit offerings to adequately address the cause.

What can cause financial stress?

The term “financial stress” delineates a concept of individual concern and worry regarding a person’s finances, and financial health and wellbeing. A survey from Morgan Stanley recently revealed that workers from a range of economic backgrounds and earning levels experience financial stress at similar rates, and so the experience of financial stress does not necessarily indicate a particular income bracket. 

The same survey discovered these commonalities between most employees reporting financial stress:

  • The majority of financially-stressed workers access credit every month to cover necessary day-to-day costs not covered by their income.

  • 33% of financially-stressed workers have a debt record which they feel is “uncontrollable.”

  • 40% of financially-stressed workers do not have adequate savings to carry them through 3 months without consistent income.

These causes of financial stress can be experienced by anyone regardless of their monthly earnings, and these realities may affect performance and productivity across all levels of a company. 

Financial stress and employee impact

Employee financial stress has a cascade effect which first impacts individual performance, then team performance and morale, and finally organizational functionality and productivity. 

Employees experiencing financial strain may perform poorly in the responsibilities of their day-to-day roles, whether due to stress-induced burnout, loss of focus from worry and anxiety, or exhaustion if they have been forced to take on more work in an attempt to address their monetary problems. Hand-in-hand with these issues are increased rates of absenteeism, where employees miss work either for stress-induced medical leave, or to address their financial problems. 

Increased absenteeism slows down production in any department, and places more responsibility and workload on the shoulders of those employees who keep showing up. This obviously can affect team morale, and in extreme cases may facilitate a difficult or negative workplace culture. 

All of these things in tandem will have a stifling influence on organizational performance, profitability, and even employer reputation. So, supporting improved employee financial health can provide a critical advantage to your company, as well as the livelihood of your workforce.

How can you help employees overcome financial stress?

So, what can companies do to address financial stress among their employees? 

One solution is to implement a comprehensive employee financial wellness solution like Origin. Financial wellness programs can include a range of helpful tools and resources that support long-term reduction of financial stress, as well as better financial literacy on the part of the employee. This can empower workers to build better financial futures for themselves and their families with financial education seminars, debt consolidation and tracking gadgets, budgeting tools, and access to financial advisors.

Organizations must also set their employees up for financial success with a thriving wage, and access to flexible benefits which employees can voluntarily engage to their unique advantage. Affordable health care, educational benefits, matched retirement accounts, and employer-sponsored financial aid are all key components that help to foster a better financial base for your workers as well as your company.

Final thoughts: Financial stress

The business case should not come first in considering how and why to alleviate financial stress for your employees. However the business case is a strong one. Financially stressed employees come at a great cost to the organizations they work for, where financially confident and healthy workers can help to accelerate your business and give it a competitive edge among others in a similar industry. 

Give your employees the advantage they need with Origin, a comprehensive financial wellness solution that gives your workers the tools they need to create long-term financial stability, for themselves, as well as your business.


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