Financial stress can significantly impact both employees and employers. With this in mind, we invited the CEO of Your Money Line, Peter Dunn, to discuss seven ways financial stress can impact employees in our recent Health Risk Management webinar.
Continue reading for a recap of Dunn’s presentation.
Financial stress is certainly not a new topic; however, it has become increasingly prevalent over the last few years due, in large part, to the COVID-19 pandemic.
The financial ramifications of the pandemic are still present today, and it’s created an important conversation about the effects financial stress can have on employees and the workplace in general.
Let’s break down the seven ways financial stress can impact employees, according to Dunn.
When employees are struggling financially, it can take a constant toll on their mental health.
During the webinar, Dunn challenged attendees to think about a period in their lives when their finances were not the best. He then asked attendees if they were of good, clear thought and mind during this time. According to Dunn, most people’s answer would probably be no.
Financial stress often leads to poor mental health, which can trickle into many different areas of employees’ lives.
Since financial stress is linked to anxiety and depression, it can often lead to decreased focus and productivity. When employees don’t feel financially secure, they often struggle to perform their job functions to the best of their abilities.
According to Dunn, here are some signs of decreased focus and productivity to look out for:
Because financial stress can lead to poor mental health and job performance, professional relationships can often become strained. According to Dunn, strained relationships in the workplace could result from the employee and/or employer experiencing a period of financial stress. For example, if the company had a bad quarter, an employer could be experiencing added financial stress, which then trickles down to their employees.
If employees are disengaged at work and unable to perform properly, this could be a sign of financial stress. On the contrary, if an employee is noticeably absent from the workplace, this could also be a sign of financial stress.
According to Dunn, turnover is one of the ultimate signs a company has an unhealthy financial culture. If employees don’t think they have the resources they need to feel financially secure, they are more likely to pursue opportunities that offer increased stability and security.
According to Dunn, financial and physical health are closely related, and employees need to feel like they have access to care at an affordable cost. If an employee is forced to question whether to seek care because of financial stress, it can have a detrimental impact on the employee and affect their overall job performance.
Delayed retirement is one of the most problematic issues associated with employee financial stress. According to Dunn, when an employee reaches retirement age but feels like they can’t retire, it costs the employer $50,000 in increased compensation and benefits per year.
Why is this? According to Dunn, employees of retirement age often make more due to their years of experience and are more expensive to insure.
Ultimately, Dunn stated that when an employee feels they have the resources they need to retire at the appropriate age, it benefits both the employee and employer.
In summary, Dunn advised employers to “eliminate from your mind that the way to solve these [financial] problems is to pay people more. It’s not a bad thing, but it’s also not a solution.”
Dunn also stated, “High salaries can’t be the goal. High stability is the goal.”
According to Dunn, achieving a healthy financial culture in the workplace involves giving employees the resources they need to manage their money properly. Without the proper financial tools, employees won’t feel secure.
For additional resources or to learn more about Your Money Line, please visit their website.
This presentation was part of Captive Resources’ Medical Stop Loss Webinar Series — regular installments of webinars to educate medical stop loss group captive members. The thoughts and opinions expressed in these webinars are those of the presenters and do not necessarily reflect Captive Resources’ positions on any of the above topics.
