Your employees’ financial health can affect every aspect of their lives, including their work performance. As an HR professional, you may wonder what ways financial wellness can impact employee talent management and retention. You may wonder how you can support your employees’ financial wellness — and what happens if your employees become overwhelmed by financial stress.
Let’s explore three ways financial wellness can impact talent management and retention.
1. Raise Employee Engagement and Performance
One of the most important ways financial wellness affects your organization is through employee engagement and performance. Employees who are stressed about their finances are less likely to be engaged at work. They’re more likely to make mistakes and struggle with creativity and productivity. A Morgan Stanley at Work study found that 78% of employees who are stressed out by their finances are also distracted at work. This stress hurts their individual work and reduces productivity levels across your company.
2. Reduce Employee Absenteeism and Presenteeism
Employees who are struggling financially are more likely to experience absenteeism and presenteeism. Absenteeism is when an employee isn’t physically present at work because they are dealing with personal issues, such as a medical emergency or a family conflict. Presenteeism is when an employee is physically present at work but not mentally or emotionally present because they are dealing with personal issues.
Both absenteeism and presenteeism can hurt your organization’s bottom line. The 2022 PwC Employee Financial Wellness Survey study found that being distracted by personal finances isn’t just an off-hours concern. Many financially stressed employees spend three-plus hours each week dealing with personal finance issues — instead of focusing on work.
3. Lower Talent Acquisition and Onboarding Costs
Another way financial wellness impacts your organization is retention. Hiring and training a new employee is more expensive than retaining existing employees.
One way to save money and keep your best talent is by supporting your employees’ financial wellness. Financial wellness helps employees be less stressed and more present when they’re on the clock. And when your employees feel supported, they’re more likely to stay. By contrast, if your employees feel like they can’t manage their finances, they’ll start looking for another job that offers better benefits or pay.
Financial wellness can have a significant impact on talent management and retention. By supporting your employees’ financial wellness, you get happier, more productive employees. They’re less likely to skip work or struggle through the day, and they’re less likely to quit.
If you’re looking for ways to support your employees’ financial wellness, many resources are available. Look at options like financial coaching and financial well-being programs, as well as workplace benefits packages that offer financial planning services. Whatever route you decide to take, remember that supporting your employees’ financial well-being is good for them and good for business.