Helping staff conquer their financial stress
Hannah McQueen says it’s not out of place for a boss to care about their staff’s money worries.
Whichever stats you care to look at, they paint a pretty grim picture about the state of Kiwi households’ finances.
We owe just a shade under $250 billion to the banks in housing debt, and 27 per cent of it is on interest-only terms – even though interest rates are near record lows.
Collectively, the nation’s households spent $4.1b more than they earned last year.
Different studies put the proportion of financially-stressed workers at anywhere from 50 per cent to 80 per cent of workers.
That indicates financial stress is not the sole preserve of the low paid, and higher wages are not a cure-all.
In my experience, many further up the pay scale find themselves in financial dire straits for a raft of different reasons.
Taking on more debt than you can afford, an unexpected child or change in circumstances, feeling strapped into a job because you can’t afford to earn less, getting close to retirement but not having a plan, or having adult children who still use you as an ATM.
All can result in financially induced stress.
That shouldn’t just be the concern of those whose finances are causing them sleepless nights – employers also need to take note.
Those workers are not only more likely to be knocking down the door begging for a pay rise, or quitting their jobs to seek better paid employment elsewhere, they’re also less productive.
A survey by PWC in the United States found financially stressed workers are three times as likely to spend five hours per week or more dealing with financial matters.
Financial stress is also linked to health problems, absenteeism, insomnia and relationship breakdown.
Other research puts the cost of lost productivity at just under $7,000 per worker, per year.
If we take a conservative approach and assume 20 per cent of your workforce is highly financially stressed, it becomes easy to quantify the financial impact.
For a business with 150 employees, it’s more than $200,000 a year; for a firm employing 10,000 people, it’s almost $14 million.
Workplace wellbeing programmes tend to focus on flexible hours, discounted gym memberships and perhaps a fruit bowl in the lunch room.
Those are great initiatives, but I would argue they’re dealing with the symptoms and not the cause of stress.
People need to be equipped with the tools to take control of their money and grow it.
As an employer, it’s to your benefit if you start those conversations, and facilitate staff getting that assistance.
Households are clearly already stretched, and as interest rates rise, that will get worse – so now is the time for employers to start thinking differently about it.