If your employees are dealing with debt or money problems, it’s normal for them to be concerned. But sometimes that stress spills over into other areas of life, such as work, and they find it hard to concentrate. And problems at work could eventually put their jobs at risk, which could lead to even more financial problems.
Getting help with their finances could potentially improve their work life and health, and ultimately make your company stronger.
How money worries hurt job performance
1. Increased absenteeism. According to a recent MetLife survey, 22 percent of employees say that within the previous year, they spent personal time during work hours, or missed work altogether, to deal with a financial matter.
Employees are also missing work for medical reasons. According to the American Stress Institute, some 75 percent of doctor visits are related to stress, including money worries. Many workers are diagnosed with stress-related illness, including headaches, ulcers and depression, which could lead to higher claims on benefits plans.
2. Reduced productivity. Stressed-out employees cost companies money. One government report suggests that employers lose about $5,000 a year in productivity from employees who are worried about having enough money saved for their expenses.
When employees are distracted by money issues they may also be more likely to make avoidable mistakes. This results in poor job performance that could financially hurt the employee even more because the worker could miss out on raises or promotions.
3. Decreased morale. An employee with financial stress is probably not a happy employee, especially if a large part of her paycheck is going toward late payments or high financing fees. As a result, the worker may not see her job as enjoyable or satisfying as she might without the debt burden.
Considering that the average indebted household has just under $16,000 in credit card debt, a lot of workers could be at risk for low morale.
4. Increased turnover. If a worker is unable to do his job, he may end up leaving the company, which could further add to financial stress. Or the worker may quit in hopes of finding a position that pays more, even if it means leaving behind non-monetary benefits the employee may have enjoyed.
How to get help
It’s normal to feel stress about money, but it’s also important to find ways to reduce those pressures before they harm careers. Employees should consider taking advantage of financial education from organizations such as Transformance, Inc. (formally known as the Consumer Credit Counseling Service), which offer strategies such as negotiating with collectors to help reduce debt and finding a budget that works.
If your employees are dealing with financial stress, help them to know that it doesn’t have to last. By learning about ways to manage expenses and live within their means, they can take steps toward fewer worries and improved performance on the job.