Research shows that, beyond the implications for overall health, employee financial wellness can have a direct impact on engagement and productivity. How is this affecting Canadian employers?
Companies are at their best when their employees are at their best. But the fact of the matter is, when employees are financially unwell, they are far less likely to be engaged and productive in the workplace – which can directly impact business success. Consider this - of those surveyed:
- The financially unwell spend almost a 1/3 more time at work worrying about their finances.
- Almost half say they are distracted at work by financial concerns.
- They are 16% less likely to say they are productive at work in general.
When you consider that 40% of surveyed working Canadians are financially unwell, this can equate to thousands of dollars of lost productivity each year. Consider the cost of just one financially unprepared employee earning $50,000 a year – it’s been estimated that lost productivity due to poor financial wellness can add up to as much as $8,000 in salary. If you multiply this across an organization, the overall impact can be staggering.
The experts agree - In our most recent health and wealth study, we spoke with professional counsellors to gauge the impact of financial stress on the workplace and 93% agreed it directly impacts productivity.
The question for Canadian employers is: Is poor employee financial wellness impacting business success?
Financial wellness means more engaged and productive employees
Our research shows that the financially well consistently show a higher level of engagement at work compared to the financially unwell. They are more likely to say they enjoy going to work, and to feel motivated and productive during the workday. They are also more likely to feel valued and supported by their employer and to feel that their skills and knowledge are well utilized.
Furthermore, 92% of professional employee counsellors say that financial wellness positively impacts overall health and workplace productivity. The bottom line is that financially well employees come to work more engaged, and are more productive during the workday.
Lack of financial wellness can mean employee stress and workplace distraction
On the other hand, when financial issues follow employees to work, they can be distracted and unfocused. In fact, the financially unwell are over three times as likely say they feel distracted at work due to financial concerns and over twice as likely to say that these concerns cause them stress. And when financial concerns are compounded with other life issues, the impact on the employee can be even worse. When personal financial stress becomes a distraction in the workplace, employees are less likely to be fully engaged with the task at hand and company goals may not get the attention they require.
Financially stressed employees may not be ‘all there’ at work
This lack of engagement can directly impact productivity and, by extension, a company’s bottom line. For one thing, there’s the impact caused by presenteeism – when employees are physically at work but distracted by other concerns. The financially unwell are more likely to be worried by financial concerns and 49% say these concerns distract them at work. Employees may be physically in the office but their minds may be elsewhere when experiencing financial stress.
Poor financial wellness has a major impact on business success
It's estimated that lost productivity due to presenteeism is three times that of absenteeism. This is not surprising when you consider that employees spend an average of two hours at work each week focusing on personal financial matters. And when they’re financially unhealthy, these personal financial matters can be a source of stress which can make an even bigger impact on workplace productivity.
Addressing financial wellness is an investment that pays dividends
Our research shows that almost all Canadians worry about their finances to some degree and that reducing that stress could improve employees’ quality of life and employers’ bottom line. This can be done by supporting employees’ needs holistically - offering education, tools and support to help them achieve financial preparedness and wellness. These types of workplace programs not only lead to employees becoming more engaged and productive, they can help workplaces gain a reputation for supporting their employees – all of which can lead to better employee retention and attraction, and a more productive and profitable company overall.
Manulife/Ipsos Reid Health and Wealth study conducted by Ipsos Reid, March 2015
Manulife Financial Wellness Study - 2016 Index
Manulife/Ipsos Reid Health and Wealth Wellness study conducted by Ipsos Reid, February 2014
Emotional barriers to financial wellness - 2017 study conducted by Manulife/Homewood