In the United States, financial health is increasingly pervasive. The burden of financial stress not only affects individuals but also has a profound impact on your workplace.
As employers grapple with the challenges of finding new talent, retaining employees and keeping everyone happy, healthy and engaged, there is a growing recognition that taking an active role in their employees’ financial well-being is not just a moral imperative but also a strategic business move.
A.k.a. Let’s talk more about finances in the office!
According to a 2022 report by the American Psychological Association, money remains the top stressor for Americans. Financial stress can manifest in various ways, from decreased productivity to increased absenteeism. I’ve said it before and I’ll say it again, the financial health of your employees is your business and should be a top priority.
I’m not suggesting you know the exact amount of debt they have accrued, how much they need to increase their credit score to be able to buy a house, or what poor money mistakes they’ve made in the past.
Instead, I’m suggesting that if you understand how and why they could have gotten into a financial pinch, you can provide solutions and options that will help them:
- Get out of this situation,
- And, set them up for success in the future.
If you can understand the financial “why’s” of just some of your employees, you can pretty safely assume that many of your other employees are in similar situations.
10 most common reasons for financial stress
Most of these are likely not super surprising. One thing you’ll notice is that if there were better financial education setup for Americans at a younger age, many of these likely wouldn’t be an issue. However, that doesn’t apply to all…
High Cost of Healthcare: The rising cost of healthcare in the U.S. can lead to significant financial stress. Medical bills, insurance premiums, and unexpected healthcare expenses can quickly accumulate, leaving individuals grappling with financial strain.
Student Loan Debt: Many Americans are burdened with substantial student loan debt, hindering their ability to save, invest, or achieve other financial milestones. Loan repayments can take a considerable portion of one’s income, contributing to financial stress.
Housing Expenses: The cost of housing, whether in the form of rent or mortgage payments, continues to be a major source of financial stress. Skyrocketing home prices and rental rates can make it challenging for individuals to afford suitable living arrangements.
Credit Card Debt: Accumulating high levels of credit card debt, often due to overspending or emergencies, can be a significant source of financial stress. High-interest rates on credit cards make it difficult for individuals to pay off their balances.
Job Insecurity: Uncertain economic conditions and the evolving job market contribute to job insecurity. Fear of job loss or layoffs can create ongoing financial stress as individuals worry about their ability to meet financial obligations.
Lack of Emergency Savings: A substantial number of Americans do not have adequate emergency savings. Without a financial safety net, unexpected expenses such as car repairs, medical emergencies, or home repairs can lead to financial crisis.
Income Inequality: Disparities in income and wealth distribution contribute to financial stress for those who may feel left behind economically. The struggle to keep up with the rising cost of living while earning a stagnant income can lead to frustration and anxiety.
Retirement Savings Concerns: Many individuals are not adequately saving for retirement. The uncertainty about having enough funds to sustain a comfortable retirement can be a significant source of financial stress, especially for those nearing retirement age.
Childcare Expenses: The cost of childcare and education for children can be a substantial financial burden for families. Balancing work and family responsibilities while managing the associated costs can contribute to stress.
Unforeseen Expenses and Emergencies: Unexpected events, such as natural disasters, car accidents, or home damages, can result in unplanned expenses. Without sufficient insurance or savings, individuals may find themselves in financial distress when faced with unforeseen circumstances.
Additionally, depending on the generation of your workforce, they may have different financial stressors. Here’s an interesting article that highlights some of these differences by generation.
Why you should care
Employers who have a vested interest in the financial well-being of their employees truly can make a lasting impact.
Beyond the immediate benefits of increased productivity and engagement, there are long-term advantages, such as:
- Attracting the best talent to your organization,
- Increased participation in workplace programs,
- Generating a more open, positive and inclusive workplace,
- And, setting the stage for future programs that truly prioritize your workforce rather than your bottom-line.
There’s a symbiotic relationship between financial well-being and organizational success. Where do you want your organization to be when it comes to financial well-being?
If you have any questions about TrueConnect’s Financial Wellness options, please click below to learn more.