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6 Ways Employee Financial Strain Affects Your Business
As a professional, you know that if employees in your company are under significant financial stress, it will inevitably deteriorate the overall workplace environment. And while it might be easy to ignore the issue because you’ve got so much on your plate—or because you think it’s the employee’s responsibility and should be dealt with privately—this is rarely the best approach for an employer to take.
In many cases, employees find themselves in a financial predicament through no fault of their own, such as after an accident or unexpected medical expense. Furthermore, it’s important to recognize the connection between financial strain and a person’s ability to pay bills and control debt, which can quickly lead to financial difficulties spiralling out of control.
In this blog post, we’ll show you how employee financial strain can negatively affect the business, leading to a poor working environment with increased accidents on the job, absenteeism, and needless turnover.
Difficulty Focusing in The Office
If an employee isn’t sure whether they can afford rent next month, or how they’re going to pay for their child’s medical bills, they’ll understandably have difficulty focusing on work in the office. This can lead to an increase in the number of workplace mistakes and accidents, and make it harder for the employee in question to communicate effectively with their co-workers.
In addition to making it difficult to concentrate, financial strain can take its toll on motivation and morale—all of which negatively impact productivity. An unproductive workforce is expensive to maintain and terrible for the company’s bottom line.
More Health Issues
An employee on the payroll can’t add value to the company if they’re sick. Unfortunately, those dealing with financial strain tend to ignore any health issues for as long as possible, which can end up increasing their frequency and severity. The associated stress can also lead to serious medical issues like heart disease, substance abuse, and eating disorders.
Increased Insurance Rates
Companies with stressed and unhealthy employees usually face higher insurance rates, which can increase running costs significantly in the long run.
More Workplace Conflicts
People under financial strain are naturally more on edge than those who aren’t. As such, employees will be more inclined to argue and fight in the workplace, leading to a hostile working environment. This can be a headache for the HR team, who then has to deal with an increase in staff resolution and disciplinary measures.
High Staff Turnover
Employees who are struggling financially are more inclined to seek work elsewhere; going in search of a better paying position or one that offers voluntary benefits such as short-term, bank regulated loans. This way, they don’t have to consider taking money out of their 401k for unforeseen emergencies. High turnover is costly for any business, as you have to invest additional resources into sourcing and training new talent.
The wellbeing of employees in the workforce is driven by the state of their financial health. By extending a hand and offering helpful financial services in the way of a bank regulated loan that doesn’t affect their credit score, you can do your part to protect your most valuable assets. TrueConnect is a voluntary employee benefits plan that offers an easy, quick, and effective way to help employees with their personal finances at no cost to the company. Get in touch today to learn more.