Research shows that, for an alarming number of employees, their financial situation is their number one source of stress. Employees also say that financial worries impact their health, while other employees show up to work but admit they are unproductive due to stress.
Employers clearly have a strong stake in addressing financial insecurity and harmful stress. Solutions are challenging because, for one, the individual’s perception of financial insecurity or stress is critical, and secondly, stigma remains a key obstacle to seeking and receiving help for financial or emotional concerns.
Financial insecurity
Financial security is the perception of having enough, without routinely worrying about money. Gallup research shows that the feeling of having enough money has far greater impact on well-being than actual income. Unfortunately, nearly half of Americans live paycheck to paycheck. The Federal Reserve reports that 47 percent couldn’t cover an unanticipated expense of $400. Other research shows most people worry about their finances, and are concerned about having enough money to cover their everyday expenses.
Stress’s effect
Stress is common — a “worldwide epidemic,” according to World Health Organization — and costly. Excessive stress damages employees’ physical, mental and emotional health. Stress is also a major cause of accidents, absence, turnover and lost productivity. People suffering from chronic stress have difficulty focusing their attention, making decisions and thinking clearly.
Stress occurs when an individual perceives that his or her coping resources may not be sufficient to manage the challenge at hand. Fortunately, it is possible to help build resilience.
Strategies for change
To help employees improve their overall well-being, we recommend employers pursue strategies that center around four pillars. The first is to address financial insecurity and stress as a matter of organizational culture, and practice to reduce stigma and normalize employees’ use of resources offered by the employer. Programs, such as EAP, financial fitness and mindfulness-based stress reduction are otherwise going to be under-utilized without strong and visible leader and manager buy-in.
The next initiative is to personalize programs to the company’s own workforce demographics. Millennials are more concerned with budgeting, student loan repayment and saving for the future, while boomers are worried about the cost of health care and retirement. Millennials and Generation X report higher levels of stress than boomers, although boomers are much more likely to have had a major stressful life event, such as a death or divorce, in the past year.
Thirdly, recognize fulfilling family commitments can be a major source of financial and emotional stress. Employers should reevaluate their family-friendly policies and program offerings, such as paid parental leave, bereavement, caregiving or other paid family leave and on-site child care. Finally, consider that nutritious food at work, physical activity and initiatives to support healthy sleep and weight management can help employees more effectively manage stressful situations.
Successful well-being programs are a win-win. Employees who embrace these programs will feel more secure and healthier — and employers will have a more engaged and productive workforce.