Did you know financial stress can lead to a 25% decrease in workplace productivity?
In a recent report on workplace wellbeing¹, a third of employees said they struggle to focus due to financial concerns, and one in four admitted this stress affects their productivity and confidence at work. Since the cost of living crisis is expected to worsen, empowering employees to feel safe and secure with their finances is no longer optional if businesses hope to continue functioning efficiently – it’s a necessity.
What’s the Real Cost of Financial Stress on Productivity?
We’d all like to be more productive – a quick search on YouTube will return thousands of instructional videos teaching the latest and greatest techniques for working harder, smarter, and faster. But when it comes to a company’s bottom line, productivity can be the difference between success and failure.
Over the last few years, more than 12% of employees have taken sick days due to financial concerns². The Centre for Economics and Business Research estimated this costs businesses £3.7 billion per year (an annual amount expected to continue climbing).
Even when employees are at work, worrying about money can:
Drain focus and motivation – constant worry makes it hard to concentrate or care about tasks.
Impair decision-making – financial anxiety can be all-encompassing and affect confidence, resulting in hesitation or distracted choices.
Decrease creativity – stress drastically limits the brain’s ability to create and problem-solve.
Reduce energy – anxiety can affect sleep, leaving employees physically and mentally exhausted.
Upset workplace morale – financially stressed employees may be irritable, detatched, or withdrawn.
Decrease overall performance – the constant worrying and cumulative impact of the above leads to lost efficiency and quality of output.
All of which spells disaster for productivity.
With that level of mental and physical strain, is it any surprise employees struggle to engage at all – let alone perform at their best?
Can Financial Wellbeing Programs Improve Employee Productivity?
If financial fears are draining your employees’ time and focus, relieving this stress could unlock mental energy and capacity that allows them to work more effectively.
Imagine driving a car with a warning light flashing every few kilometres. It’s distracting, pulling your attention from the road, and you’ll be constantly wondering if your car is about to break down.
But if we fix the issue, then the light disappears – and suddenly you can focus entirely on the road and driving optimally.
The same is true for financial stress in the workplace: by eliminating this debilitating concern so it no longer pulls on an employee’s attention every few moments, they can be fully present in their role and perform tasks at their best.
How To Improve Employee Productivity and Financial Wellbeing
So what can employers do to ease financial stress and unlock their workforce’s full potential? Especially if your company can’t afford to increase salaries or isn’t qualified to provide financial advice?
Thankfully, several financial wellbeing benefits are available, for either one-off low costs or even for free. For example:
Salary advance schemes – provide access to earned wages before payday, preventing reliance on payday loans.
Debt management support – offer resources or financial advisors that help employees manage their financial difficulties.
Hybrid working arrangements – reduce commuting costs to free up more income without a salary increase.
Salary sacrifice schemes (e.g., childcare vouchers and cycle-to-work offers) – enable employees to save on essential expenses by paying before they’re taxed.
Workplace pension scheme – improve employees’ long-term financial security.
Financial education and resources (such as training Money First Aiders) – equip employees with the knowledge and opportunities to get help and make smarter financial decisions.
Even if an employee never uses these benefits, simply knowing those resources are available and their employer has their back can bring a sense of security and peace of mind. That reassurance alone can alleviate a significant amount of stress – without the employee having to take any action at all.
The Best Employee Wellbeing Benefits For Your Company
Choosing the right financial wellbeing benefits to improve employee productivity can depend on your company’s size, workforce demographics (such as average age or location), and feasible working arrangements. Can your employees work remotely? Are they nearing retirement or starting young families? Understanding their needs is the key to offering benefits that make a difference.
The best way to find out? Ask your employees what kind of support they need most. Some may prefer better pensions, others might prioritise financial education, while many could value improved childcare support.
But here’s the challenge: not everyone knows what will help – they just know they’re struggling. Yet a survey by Pluxee UK³ found more than half of UK employees feel embarrassed about their lack of financial literacy, which could make them too ashamed to reach out; especially in workplaces that don’t have an open-door policy on financial wellbeing.
Enabling a few employees to train as Money First Aiders can be a game-changer. Having a peer they can talk to feels less intense and removes the awkward stigma around money, making it easier for employees to seek support. More importantly, it fosters a workplace culture where financial wellbeing is openly discussed and encouraged.
Businesses that invest in financial wellbeing training have found the education positively impacts existing schemes too; empowered by their new knowledge, employees make smarter decisions around pensions, savings, and other financial programs – all of which adds up to long-term gains for both the individual and the company.
Conclusion: The Link Between Financial Wellbeing and Productivity
Financial stress is one of the biggest but most unknown drains on workplace productivity. Employees preoccupied with money worries find their focus, decision-making, motivation, and confidence all negatively affected – leading to lower efficiency, more mistakes, and reduced overall performance.
But by investing in financial wellbeing initiatives – whether that’s offering salary sacrifice schemes, implementing pension programs, or training Money First Aiders – companies can embolden their workforce to become more financially secure. And when their employees aren’t stressed about money, businesses have already seen a more engaged, present, and high-performing workforce.
In an economic climate that seems to be on a long downward trend, getting on top of your employees’ financial stress today is no longer a perk – it’s a business necessity. Investing in financial wellbeing schemes or benefits is possibly the best way to increase staff productivity and, by extension, improve overall results.
If you’d like to know more about Money First Aid training for your company, please reach out below – we’d love to help you out.
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