Financial stress is taking a toll on employees' social lives

By Lee Hafner July 03, 2023, 1:38 p.m. EDT 3 Min Read

The opportunity to engage with friends and family is seemingly back to normal post-pandemic, but financial strain is keeping employees from accepting invitations to important social events, impacting relationships in and out of work.

Financial wellness platform BrightPlan's 2023 Wellness Barometer Survey revealed that among a mix of C-suite, HR leaders and employees, 92% were stressed about their finances. In addition to causing distraction from work, concerns over financial instability and debt have led to 64% saying their social well-being has been negatively impacted, and 72% have passed up weddings, birthdays and opportunities to be out with friends, family and coworkers.

The effects of poor employee financial health on employers are inescapable, with half of surveyed employees reporting their engagement and productivity are down. C-suite reported a loss of 16.8 work hours per week and HR leaders reported a loss of 12.4 hours per week, which in turn has led to organizations losing almost $200 billion annually.

"When an employee is stressed about finances, that's top of mind for them," says Marthin De Beer, CEO of BrightPlan. "You cannot show up as your best self at work and it leads to social stress in your relationships. There is also a real impact on the bottom line of a company. Employees might be at the office, but dealing with other issues or just can't focus. It's a very smart business decision to address this issue."

To help employees regain their financial footing, employers can tap into existing benefits that help ensure financial preparedness — the lack of which is one of the leading causes of instability, according to the survey. Only 18% of those surveyed have basic financial literacy.

Meanwhile, 85% of respondents said they have debt, with almost half carrying an amount they deem unmanageable. Over a third have no emergency savings or only enough for two months, and over half are setting aside less than 10% of their income for retirement, if anything at all.

Ninety-five percent of leaders believe they should offer financial wellness benefits, yet other than retirement matching and company stock options, less than half of employees use the financial options available to them. A financial wellness service that combines digital tools with human touch can help employers offer more personalized benefits for their workforce, therefore laying the foundation for high utilization, says De Beer.

"Employers can be overwhelmed by which choices they need to make when they look across a benefit portfolio, and they find it very hard to optimize," he says. "If you can give clearer and more personalized guidance in your benefits election, it will lead to higher-quality outcomes for the employee. A financial service can answer questions proactively through education, but also reactively with a human adviser who can help them make the right benefits selections."

Allowing employees the chance to improve their overall wellness can help them start saying yes to social engagements again, and can also help to establish a stronger relationship between workers and upper management. The survey found that employee trust has dropped from 83% to 63% over the past year, signifying a deep need for employers to find significant ways to connect.

"There's a major disconnect which is eroding trust because people are struggling, and they're not feeling that companies are stepping up to help in ways they can," says De Beer. "When managers step up, not only does it lower financial stress, [improve] personal relationships and allow employees' to bring their best selves to work, but it also engenders a tremendous sense of loyalty. When you help employees with their personal finances, help them send their kids to college and achieve their life goals and dreams, you truly become the best place to work."

Lee Hafner

Editor, Employee Benefit News