How Many People Are Affected by Financial Stress?
According to a recent study, as many as one-third of all employees can be stressed out over their financial situation. Among that group, half ended up being so stressed that it affected their job performance in a meaningful way. Add to this that these issues also disproportionately affect low-to-moderate income employees that already have more challenges in their day-to-day lives and it is a rather sobering statistic.
This is a bit of a revelation to me despite the fact that I’m hugely concerned with my own financial situation. I think the fact that talking about money is still rather taboo in the workplace can cause people to underestimate the difficulties that others may be facing. This is especially true once you start working your way across the boundaries of status and position within the company. Other than the odd “Man, I’m broke after this weekend!” comment at work, I honestly have no idea how everyone is handling their affairs and whether or not they are actually making good decisions. To think that 15% of all employees are actually experiencing reduced performance is also a bit of a revelation to me as a manager of people because that means that my workforce is operating 15% less efficiently that it could be.
What Types of Problems are Associated with This?
Financial stress can cause lower levels of productivity as well as increased levels of dishonesty, absence, accidents, substance abuse, and general disability and worker compensation claims.
If you break this issue down and look at what we tend to do when we are stressed in any situation (make bad choices) then a lot of these things are perfectly natural responses. Now, just because they are natural does NOT mean that they are okay. What I mean is that as humans we are not perfect and we are definitely influenced by our environment and circumstances. If I’m completely broke, feeling trapped in my job, and resenting my more highly-paid superiors then I am going to be much more likely to make bad choices at work.
When you are stressed you start to revert into the “fight-or-flight” survival mode and all of your decisions will reflect this mindset. In most jobs there are constant opportunities to help yourself at the expense of the company and others. Wrapped in the moral blinders of this primitive response you will be much more likely to steal products or money, abuse the time card, or plan a minor injury on the job in order to get compensation. At this point you are operating from a “man-against-the-world” thought process and you will do whatever it takes to restore security and power to your situation.
At first I was a little surprised to see substance abuse on the list, but unfortunately it makes perfect sense if you think about the typical reason for such abuse: escaping reality. I’m sure people use drugs for a variety of reasons and I would hate to cheapen your vision quest while high on ayahuasca, but the typical drug abuser is looking for an escape from whatever problems he or she is facing in the real world. It is much easier in the short-run to run from your problems or hide behind something else to make the pain go away. It starts out as a little stress relief while your issues are minor, but as your problems grow so too can the drug use. Once the drug use has taken hold it will often exacerbate the original issue and simply lead to a vicious cycle. What’s worse is that for otherwise healthy individuals that have battled the disease in the past and have managed to kick it adding financial stress back into the mix could be what sends them back to using.
I think we can all agree that stress of any kind is a nasty disease and it’s extremely important that we work towards eliminating it whenever and wherever we can!
What Can Employers Do to Help?
So, what can employers do to help? Well, the study was focused on the involvement of credit unions within businesses to help provide opportunities to employees and give them a road to recovery.
The bottom line is that what we really need is more education and open communication in the workplace about financial stress and what to do about it.
I can tell you first hand that this is absolutely true. Since I took on a new position and have dozens of people that I’m responsible for on a day-to-day basis I’m starting to realize that a lot of folks just simply don’t know much about personal finances. I used to think that I was a novice, but at least I could follow the game and comment on the plays. There are many, many people that do not know about even the basics and they do not know that:
- They qualify for the company 401k or even what a 401k is in the first place
- The company will provide matching “free money” on their contributions
- Differences in health insurance plans (premiums and deductibles, etc)
- What an HSA is and how it could be saving them money
- How to set their tax withholding and where their paycheck is going
It is absolutely sad that so many people do not have the basic education they need to help themselves with financial stresses and burdens. Unfortunately, the majority of the people that I’m talking about are relatively low-paid employees whether because they are entry-level positions or because of the nature of the business. Now, I’m not saying that starting a 401k and throwing a few dollars into a savings account each month will turn everyone into Donald Trump, but it is certainly a start and it will give people more confidence in their lives so that they will be able to accomplish more in the future.
What Are Some Things We Can Do As Employees to Help Ourselves?
The difficult part of answering this question is that if employees don’t know that they don’t know something then they simply can’t help themselves. However, I have seen employees walk right by a brochure explaining employee benefits everyday and never pay any attention to it. So, you could say that everyone has the same access to free information on the internet (such as this website and others like it), but I think that this mentality is a little bit unfair. I have certainly had a personal interest in money, finances, etc for most of my life and I also have formal education on the subject, but the harsh reality is that many people have not had the influences and advantages that I had growing up. It is not hard to imagine a scenario in which your parents were poor, resented money, didn’t work, didn’t care about your education, or a variety of other things that would lead you away from financial knowledge. I’m not going to go too far down that road because it’s a whole different topic, but I’ve laid my case.
We should do what we can to help each other and spread the word about personal finance and especially help those we work with in finding out what benefits they are entitled to. It just might reduce our financial stress and make all of our working lives a little bit better!
The issues described above have motivated me to put together some type of presentation on personal finance and especially company benefits that I will provide free to anyone and everyone that wants to learn about it in my company. I think this is a great way to help educate people and do my part to help reduce financial stress in my own work environment! If I manage to get it off the ground I will talk about it in a future post. Let me know if you have any ideas or experience in this area!