Financial stress is trending.
Growing numbers of employees are reporting feeling stress and anxiety related to personal finances. How does this relate to workplace well-being? Self-reported data from Carebook’s Corehealth Checkpoint (formerly called Wellness Checkpoint by Carebook) from January 2021 to December 2021 suggests that there's a link between financial status and health - both mental and physical.
Mental Health and Financial Status
Almost 60% of respondents with very poor financial well-being have moderate to severe depression. At the same time, just under 5% of those with good financial well-being experience moderate to severe depression. While it’s unclear if one causes the other, there is clearly an association between economic hardship and poor mental health.
Physical Health and Financial Status
Mental health isn’t the only thing affected by poor financial standing. The data also shows a connection between finances and physical health: among employees who have very poor financial well-being, over 60% also have two or more chronic illnesses. On the other hand, less than 25% of those with good financial well-being have two or more chronic conditions. Strong finances and good health appear to be related.
Causes of Financial Stress
There are various causes of money-related stress. Younger employees tend to have more issues with personal debt, mainly from student loans, in addition to inflation, rising interest rates, an increasing reliance on credit, and in urban areas, the fading dreams of financial security through home ownership.
Meanwhile, older cohorts now face the rising cost of servicing debt they once thought would be minimized by steady growth in value. And at the upper end of that age group, rising costs are cutting into what seemed to be a sizable nest egg to provide a comfortable retirement. A lack of retirement preparedness may now be another major source of stress.
In fact, data from the assessment show that 56% of employees rate their future financial preparedness as poor or very poor. More than one in four employees report poor or very poor management of their own current finances. And among employees aged 40 and up, 30% report poor or very poor retirement preparedness.
How To Improve Employee Financial Well-Being
Fortunately, there are proven ways employers can help. By focusing on financial wellness in an employee well-being program, organizations can provide access to resources and support, to help employees meet their financial goals. Improving overall employee financial well-being could be as simple as incorporating it into a broader employee well-being program. Well-being programs are a logical place to introduce financial health content because of the connection between personal finances, mental health, physical fitness, productivity, and overall quality of life.
A Case Study
What does this look like in the real world?
A senior director at a major Canadian bank discussed his company’s financial wellness endeavors in a 2022 webinar about corporate health and wellness. He stated, “[in our organization] we were meeting the [financial health] benchmark but wanted to do to better. That is the reason we included financial well-being questions in the survey. Data from the checkpoint helped us to zero in on where we could focus: specifically, how we could support [financial] goal setting, tracking progress and being prepared for retirement.”
Their well-being program incorporates four pillars, one of which is financial health. The motivation behind the push on financial wellness includes making sure employees “Have the support to confidently make their short and long-term financial goals a reality,” he stated.
This support likely contributes to the statistic shared from the CoreHealth Checkpoint data, that “86% of team members agree that [leadership] genuinely cares about their well-being.”
By addressing financial wellness in a broader employee well-being program and providing employees with the resources and support needed to meet their financial goals, leaders can start to improve mental health, physical fitness, increased productivity, and greater job satisfaction. Now that’s a solid investment.