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The Missing Link Between Financial Stress and Mental Health

Are employers missing the link between financial stress & mental health—or choosing to ignore it?

Workers are nearly unanimous in their belief that a company’s culture should support mental health — including 91% of job-seekers, according to a report from Mind Share Partners. 

As it turns out, leaders are nearly unanimous on the need for mental health support, too; 92% of CEOs say their companies are focusing more on mental health since the pandemic began, according to a study by Ginger. In addition, 80% of CEOs acknowledge that poor employee mental health hurts worker productivity, and they’ve seen the data on how mental health support improves employee positivity and reduces stress. 

So if leaders agree that providing mental health options is critical to employee well-being and company performance, why are employees’ mental health challenges still increasing? In fact, the American Psychological Association found in October 2022 that over 25% of people can’t function most days because they are so stressed.

In many cases, employers try to put a Band-Aid on the problem by offering benefits such as meditation memberships, virtual yoga classes, or mental health days. And while those offers have value, they may not solve the underlying stressors employees face. 

Why? Because, for 9 in 10 Americans, that stressor is money.

Financial stress plays a significant part in mental well-being and how people show up at work. More than three in four stressed employees surveyed by PwC say financial worries negatively impact their productivity. If these worries go unattended, companies could find themselves losing workers, as these financially disengaged employees are twice as likely to already be looking for another job. 

Given the lack of financial education in the U.S., it’s not surprising that money is such a big source of stress. Right now, less than half of the general population has a budget, and fewer than one in three have a detailed plan for what to do with each paycheck, according to The Harris Poll. Furthermore, three-quarters of Americans surveyed by Schroders don’t think they can save enough to retire. That’s a big deal — and a big miss for employers. 

It’s high time that employers recognize financial stress as a major factor in employee well-being—and do something about it. 

Employers can address employee financial stress in several ways: financial literacy programs, comprehensive retirement and investment options, honest conversations about pay and inflation, holistic financial planning tools, and personalized financial coaching, to name a few. Financial wellness programs that include coaching work because they help employees create realistic action plans, improve financial behaviors, and reduce their money-related stress, which helps them be more focused and productive at work. 

As good as these solutions are, the bigger challenge is getting employees to feel comfortable openly sharing their financial stress. According to PwC, 41% of financially stressed employees are too embarrassed to seek financial guidance.

So how do you solve a problem employees don’t want to talk about? Outsource it to someone your employees do feel comfortable confiding in, like an AFC® certified coach. By creating personal and consistent connections with a coach, employees can get to the root of financial issues, define what it means to be financially healthy and make a plan of action. 

When you empower your employees to gain control over their finances, you offer them control over their lives and mental health. And when they’re in control of their well-being, they show up better at work and are more likely to remain with your company, reducing turnover costs. 

But you have to help them get there first.

The link between financial health and mental health is clear, and it’s up to you as an employer to unlock the solution for your employees.

Questis will be here when you’re ready to take action. We will help uncover the root causes of your workforce’s financial stress—and help fix it —so that you can put your focus where it’s needed most. When it comes to financial wellness, leave the heavy lifting to us. Schedule a demo to see how Questis could empower your team today.

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