Why employee financial strain is taking a toll on your business

October 05, 2018|By Instant Team
Financial stress takes a toll on employee engagement

Engaged and invested employees are the backbone of any successful business, especially in the service industry.

From waiters to retail clerks, these employees provide the first–and sometimes only–human interaction a customer has with your brand, which makes growing employees engagement at your business invaluable.

But holding on to your most engaged and invested employees is a challenge, and it’s even more of a challenge to develop and grow these characteristics if many of your employees are disengaged from the workplace.

Before even beginning to nurture workplace investment and employee engagement, you need to find an answer that explains why they’re disengaged in the first place. One of the main reasons is financial stress.

According to a 2017 study conducted by Gallup, only 32 percent of Americans feel engaged at work. That means a staggering 70 percent feel disengaged. Today’s hourly workers are far less satisfied with their jobs compared to individuals in salaried positions, and that has less to do with the nature of the job and more to do with the benefits and pay that come with it.

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You need to find an answer that explains why they’re disengaged in the first place. One of the main reasons is financial stress.

Hourly Workers Work-Related Satisfaction

Gallup’s’ research also shows clear links among financial distress, workplace productivity and health. So, when employers improve their employees’ financial well-being, they’ll also see improvements in their businessengaged employees are far more involved in, enthusiastic about and committed to their work.

Employee financial strain isn’t just a societal problem, it’s a business problem. Here are four ways employee financial strain can have a negative impact on your bottom line as a business.

Distracted Employees

Poll results show that 45 percent of millennials–which make up a majority of today’s hourly workforce–say personal finance worries impact their ability to do their job.

  • 85% of working Americans say they deal with personal finance issues during working hours at least occasionally.
  • 56% believe they have coworkers whose job performance has been impacted by financial stress.
  • Less than 50% say their employers offer some type of help or benefits for employees seeking financial assistance.

*Information via Workplace Options

Each time you switch your focus, you compromise your effectiveness at work. Employees who are distracted by outside stressors like finances are more forgetful, less attentive and less capable to make quick decisions. These distractions not only affect the quality of your customer service, but depending on your business, can simply be dangerous.

Absenteeism

Worry over financial matters can cause anxiousness, irritability, fatigue and sleeplessness—all of which can take a toll on a person’s overall health. For a business, this means more sick days and higher health costs. According to research conducted by the Society for Human Resource Management, absence and tardiness are 34% higher among financially stressed employees.

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Absence and tardiness are 34% higher among financially stressed employees.

Higher Turnover

Employee turnover in the U.S. is at an all-time high, especially in the service industry, which is largely made up of hourly employees.

A recent survey conducted by Gallup found that in 2016, the restaurant industry saw a whopping 73% employee turnover rate, with the retail industry not far behind at 65% turnover.

With only 29% of hourly employees reporting they were satisfied with their wages, this leaves the majority of our hourly workforce on a constant search for better opportunities, making them more likely to quit their job for an employer that provides more pay and financial support.

Download our whitepaper to see solutions to reduce employee financial strain

In our whitepaper, we dig into what you can do as an employer to remove some of the financial stress of your employees. Solutions we share can be applied immediately and are proven to lead to immediate and maintainable results.

Pay employees instantly and see results

Instant Financial is the only platform that gives your employees access to their pay right after each shift—at no cost to them.