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How Financial Stress Impacts Employees
and How Employers Can Help

Well-being experts have long known that there’s a connection between employees’ physical health and their productivity and engagement on the job. The same holds true for financial health. When employees are stressed out about their finances, it can have a real impact on how they show up for work. Our third installment on financial wellness digs deeper into the effects of employee financial stress in the workplace and what employers can do to help.

How does financial stress affect productivity and employee engagement?

It causes distraction.

According to one survey, 63% of respondents said their financial stress had increased since the start of the pandemic. And nearly half (45%) of employees whose financial stress increased also said that finances have been a distraction at work.1

Consider the case of Mitch, a 29-year-old insurance adjuster who is married with a 2-year-old son and another child on the way. Mitch and his wife met in college and are paying off a combined $40,000 in student debt. They just purchased a new condo, so they’re also making mortgage payments for the first time.

Mitch has been waking up at night, stressed about all the new expenses and how they will manage when the baby comes, especially since his wife needs to take unpaid leave. As a result, he arrives at work sleep-deprived and distracted. He also spends time on the job researching ways to cut down on expenses and on phone calls to his student loan servicer to see how he can lower their monthly payments.

Needless to say, Mitch’s focus is not always on his job—and this affects his productivity.

It impacts health.

A 2018 survey by Lending Club revealed that Americans who report poor financial health also tend to have poor physical health. They are significantly less likely to practice healthy physical habits—59% do not get routine check-ups and 60% do not get regular exercise—and they are more likely to skip preventive health measures due to cost (38%).2 Moreover, according to the American Institute of Stress, when someone is stressed about their finances, it can impact both their mental and physical health. Symptoms can include:

  • Increased irritability 
  • Anxiety
  • Mood swings
  • Appetite changes and stomach issues
  • Muscle tension or pain, including headaches
  • Fatigue
  • Sleeplessness

And without support, these symptoms can worsen and contribute to more persistent anxiety, depression, and even thoughts of suicide. Because financial stress impacts all dimensions of well-being in one way or another, employers need to find a way to step in and help.

It puts a damper on engagement.

When employees are experiencing financial stress, engagement and morale can suffer. However, a 2019 MetLife survey found that employees who are on track with their finances tend to be more productive, engaged, and loyal. In fact, of employees who were on track with financial goals:

  • 88% were satisfied with the job they have now.
  • 85% were committed to the organization’s goals.
  • 87% were likely to still be working for their organization in 12 months’ time.

The study also showed that employees who felt good about their financial health were happier (84% vs. 55%) and more engaged (78% vs. 53%). Finally, there’s the cost of turnover. If employees are stressed about their financial situation and don’t feel their employer is sympathetic, they might leave—leading to increased recruitment and training costs.

The upshot? It’s in every employer’s best interest to pay attention to financial stress among their employees.

There is a real cost to the bottom line of not doing so. A 2017 Mercer study found that for a company of 10,000 employees, distraction due to financial stressors could translate to 1,922 hours and $28,830 in lost productivity every week! The same study noted that employers report $250 billion lost each year due to stressed employees at work.

How to support your populations’ goals to achieve financial wellness.

Luckily, there are several ways employers can step in to help their populations improve their financial wellness. Here are some things you can do for your people:

1. Learn what employees want in a financial wellness program.

Want to offer a financial wellness program, but not sure where to start? Just ask. Send out pulse surveys to see which types of offerings your employees want—and expect—you to provide. Then, you can check their recommendations against your current offerings to find any gaps that you can fill, such as with student loan repayment support, or 401(k) match programs, or simply scheduling seminars with a professional financial planner.

2. Offer a financial wellness program through an external vendor or package publicly available tools for a DIY approach.

Many companies choose to work with an external partner to offer a full suite of financial wellness tools, coaching, and education. These could include mobile apps to help with budgeting, calculators to model savings for retirement, one-on-one sessions with a financial coach, or self-paced mini courses to teach personal finance basics. If budget doesn’t allow for a full-fledged program, promote resources available from the Consumer Financial Protection Bureau, National Credit Union Administration, America Saves, or the Financial Literacy and Education Commission.

3. Take a look at benefits you already have that employees may not be taking advantage of.

Chances are you already offer several programs that help employees with financial wellness—they just may not be branded as such. If you offer employer matches on 401(k) programs, communicate about it to ensure that interested employees are contributing enough to benefit. Remind employees about Health Savings Accounts, which allow you to save for medical expenses in retirement tax-free. Your EAP likely offers lots of assistance with financial wellness, so urge employees to take advantage of those resources, too.

4. Make sure employees know about your financial wellness program and that it’s confidential.

Sadly, many employees do not know about all of the great benefits their company offers. So if you provide a financial wellness program, be sure to communicate it. A splashy launch followed by a regular cadence of communication will ensure that employees who aren’t quite ready to dig in to all the resources now will know just where to go when they do. It’s also important to reinforce that accessing financial wellness services is completely confidential, and the employer will not receive any personal information about its employees’ financial situation.

Adding financial wellness into a benefits package may sound complicated, but it doesn’t have to be. Remember, the easiest way to find out what your employees need help with is to ask them! Then, follow up with proper resources to let them know their voices have been heard. If you need help determining how to add financial wellness to your well-being program, visit our website or contact us at

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