HRM looks at how financial anxiety is affecting employees and the bottom line, and how employers can help ease the strain.
Financial anxiety is widespread in Australia, and the impact is being felt in the workplace. While financial-related stress dipped this year, it’s still considered one of the leading causes of personal anxiety across the country. National Australia Bank’s quarter two 2017 consumer behaviour survey found worries about the cost of living feature prominently in the minds of Australians, affecting 64.2 per cent of the population. This day-to-day financial stress surpasses fears about job security.
Common triggers of financial anxiety are:
- home loans
- retirement funding
- supporting the family
The effects of financial anxiety
Financial stress has serious implications for mental health. People with money worries can experience sleeplessness, fatigue and loss of appetite which can in turn manifest in depression, anxiety and substance abuse.
Unsurprisingly, financial anxiety is increasingly becoming a workplace issue. Similar to other mental health conditions, employees suffering from financial stress show higher levels of absenteeism and lost productivity. They may experience difficulty concentrating, decreased levels of morale and effects to co-worker relationships.
An AMP Capital report shows that employees who are experiencing financial anxiety lose an average of 6.9 hours per week in productivity. And in 2016, AMP estimated employee financial stress costs employers an average of $47.2 billion annually.
How employers can take action
Short of giving all staff members a raise, how can employers help ease some of the financial stress the workforce is suffering? Recent research conducted by PwC in the US says helping employees become more financially literate can go a long way. “Our findings evidence a direct correlation between an employee’s financial well-being and a company’s bottom line and may help justify an investment in a financial wellness program,” says Kent Allison of PwC.
A 2016 survey by Workplace Super Specialists in Australia (WSSA) found lack of financial wellness and literacy is leading to stress and anxiety. “We know employees who lack financial wellness tend to be more stressed, as observed by more than three in five employers (63.3 percent),” says Terry Rhodes of WSSA.
What makes a good financial wellness program?
In a 2017 report on financial wellness, The society of Actuaries says it’s essential to identify the level of financial literacy of employees and which areas they are lacking knowledge. Programs should then be tailored to different age and income brackets to have maximum impact. Issues focussed on could include day-to-day budgeting, paying off student loans or mortgage management; depending on the needs of employees.
Other things to consider when implementing a financial wellness program include:
- How to measure and quantify the program’s success so as to justify allocating resources.
- The depth of the program – whether it will consist of online modules, group sessions or having a financial planner on-hand.
- Whether the program will be compulsory for all employees.