The impact of employee financial health at work

The 2017/2018 Willis Towers Watson Global Benefits Attitude Survey shows a clear relationship between employees’ financial worries and their work performance, engagement and absence. Specifically, the survey finds that employees who are financially struggling lose 41% more work time to absence than peers without financial worries; have lower engagement levels than peers without financial worries (51% vs. 29%); and are less productive compared with peers without financial worries (32% vs. 5%).

Willis Towers Watson had the unique opportunity to explore in depth the association of financial stress and onthe-job performance using a large employer’s experience. Our goal was to measure the magnitude of the difference in the performance of financially stressed employees and non-stressed employees. To do so, we used the employer’s detailed records of work quantity and quality for a relatively homogeneous and sizeable group of 17,000 employees — all of whom served in consumer-facing roles.

We determined the financial stress level for each employee based on the employer’s administrative records. We categorized the employees into high, medium and low levels of financial stress and then compared the three categories on a number of metrics.

We then split the group of employees into two subpopulations according to their job specifics: field technicians or phone agents. After standardizing the performance measures to a scale with mean 0 and unit variance, the differences between high, medium and low financial stress levels came into focus:

The field technicians demonstrated a strong association between financial stress and job performance.

The high financial stress field technicians demonstrated significantly poorer work performance relative to peers with low financial stress (statistical significance of the comparison p < .001).

For phone agents, the pattern of differences was similar but not as pronounced.

This difference between the phone agents and the field technicians suggests that the impact of financial stress on productivity varies across occupations. There could be many reasons for occupational variation, but one speculation is that field technicians, lacking constant contact with supervisors and coworkers, may be more susceptible to the intrusions of personal financial problems during the work day. Financial stressors might be triggered by phone calls, or ongoing financial worries could become an overwhelming distraction. These effects could degrade the quantity and quality of work output as employees take longer or more frequent work breaks or, because of divided attention, take more time to perform tasks correctly.

Nevertheless, the impaired job performance observed in the employees with high financial stress are concerning because of the potential impact on customer satisfaction and customer retention, both key determinants in profitability.

Moreover, the impact could be more pronounced and worrisome in industries where worker impairment can create a hazard for coworkers or the public, such as utility, transportation, construction, petroleum, food, WILLIS TOWERS WATSON is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees in more than 140 countries. For more information, please visit www.willistowerswatson.com or contact Leah Denoga at leah.denoga@willistowerswatson.com chemical and pharmaceutical production and manufacturing, and medical, to name just a few.

In addition to job performance, we also analyzed the relationship between financial stress and time lost to absence measured by sick days, unpaid leave and non-pregnancyrelated disability leave. Highly stressed employees took 1.75 absence days to every one day taken by low-stress employees (statistically significant, p < .001).

Like most corporations with customer service units, the employer we studied measured the activities of its customer-facing employees on a routine basis. The company assessed the quantity and quality of each employee’s work output. The employer used the specific benchmarks (e.g., percentage of first-call resolution) as well as a composite score resulting from a combination of the individual metrics.

For the one-year period of the study, Willis Towers Watson used the specific metrics to compute an average composite score for each employee who met the following characteristics: full time, permanent, benefitseligible with at least six months tenure and adequate work quantity. Employees with limited overall work quantity — those in the lowest 10% of their group — were excluded.

Before looking at the differences between low-, medium- and high-stress individuals in the population, the employees were separated into two subpopulations: field technicians (“field”) and agents serving customers on the telephone (“phone”). Because the responsibilities and work environments differed for the field and phone employees, the employer used different criteria to assess the performance of employees in the two roles.

Additionally, the demographic characteristics of the field and phone workers were different. The field technician population was almost entirely male (99%), with many having dependents, while the phone agents were more balanced in gender (41% male). The two subpopulations were considered dissimilar enough to warrant separate analyses.

Prior to analysis, the composite scores for each subpopulation were normalized. Within field and phone groups, differences between the employees having low, medium and high financial stress were tested after taking into account any differences in age and gender inherent in the financial stress levels.

Echoing the findings of the Willis Towers Watson Global Benefits Attitude Survey, our employee study found financial stress varies according to life stage. Middle-age employees (age 35 to 54) were far more likely to be in the high and medium financial stress groups than their younger (age 18 to 34) and older (age 55 and over) cohorts.

It is easy to understand why middle-age employees are more financially stressed. Middle-age years are the peak for the expenses of family building and child-rearing, typically including pivotal financial decisions concerning housing, automobile, education, technology and day-care needs as well as more volatile medical costs. The study results show that 69% of the high-stress group had children compared with 42% of the low-stress group. Additionally, more than a quarter of the high-stress group were single head of household, compared with only 10% of the low-stress group.

What can employers do? There is no onesize-fits-all strategy for supporting the financial wellbeing of an employee population.

At an aggregate level, each workforce has different characteristics that impact financial decision-making skills, influences and, ultimately, financial wellbeing. Characteristics of the population such as social and media