A Win-Win for Employees and Business

40% of job turnover is due to stress. It's a hard truth, but if your employees suffer financially, they are most likely searching for new job opportunities. According to the Society for Human Resource Management (SHRM), replacing an employee cost up to 50-60% of an employee's annual salary in direct costs (recruitment and retraining), with total costs associated with turnover (once you factor in things like productivity loss etc) ranging from 90% to 200% of annual salary. By implementing strategies to reduce turnover, you can also boost productivity and drive overall company success.

Feeling the Pinch: How Financial Stress Can Drive Employee Turnover

Financial stress is a constant companion for many workers. Between mounting bills, debts, and the rising cost of living, it's no surprise that money worries are a top source of stress. But what impact does this financial strain have on the workplace? The answer is significant: financial stress can be a major driver of employee turnover.

Here's how financial worry can lead to employees leaving:

• Seeking Opportunities with Better Pay: When financial needs aren't being met, employees become more receptive to opportunities offering higher salaries or better benefits packages.
• Distraction and Decreased Productivity: When employees are consumed by financial anxieties, their focus at work suffers. They may be mentally preoccupied, leading to mistakes, missed deadlines, and lower quality work.
• Absenteeism and Presenteeism: Financial stress can manifest in physical health problems, leading to more absences. Additionally, employees might be physically present but mentally checked out, a state known as presenteeism, further impacting productivity.
• Reduced Morale and Engagement: Financial worries can create a sense of hopelessness and detachment from work. Employees struggling financially are less likely to feel invested in their jobs or the company's success.

The cost of employee turnover is high.

• Financial Wellness Programs: Offering programs that educate employees on budgeting, debt management, and saving for retirement can empower them to take control of their finances, reducing stress.
• Competitive Compensation and Benefits: Regularly reviewing salaries and benefits to ensure they remain competitive is crucial. Consider offering flexible spending accounts or repayment assistance programs.
• Employee Assistance Programs (EAPs): Providing access to confidential counselling services can help employees cope with financial stress and other personal challenges.

Traditionally, companies might have shied away from offering programs to their employees due to concerns about privacy. But the tide has turned! According to Graystone Consulting research, 74% of employees value financial wellness benefits from their employers.

And the good news doesn't stop there - a significant 71% of employees feel comfortable receiving professional financial guidance right at work. It's clear that programs are a highly valued benefit that employees are eager to receive.

Thanks for reading!

Dean Lawson

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