Money worries jeopardize productivity, studies find
Employers worried about a temporary drop in productivity caused by workers distracted by the NCAA college basketball tournament might want to focus on a potential year-round bracket buster.
Studies by human resource consultant Mercer and the Employee Benefit Research Institute indicate workers spend a good deal of time on the job worrying about money.
Mercer said 16 percent of the more than 3,000 workers it surveyed in September reported spending 20 or more hours on the job each month worrying about their finances. The average time fretting about finances was 13 hours a month. The median was five hours, meaning that half of those surveyed worried less than five hours a month and half of them spent more time than that.
The survey also asked workers for pay information, allowing Mercer to estimate how much the worriers are costing their employers.
The magnitude of the cost might surprise you: 4.5 percent of payroll, according to Betsy Dill, a senior partner with Mercer. While some are skeptical of such estimates, Ms. Dill said the productivity loss is real.
The problem is apparent in the Economic Benefit Research Institute’s latest annual retirement confidence survey, which found 30 percent of workers feel mentally or emotionally stressed about preparing for retirement. Another 30
percent say they worry about their finances while they are on the job and acknowledge anxiety is curbing their productivity.
A survey conducted by the Society for Human Resource Management a few years ago indicated that 70 percent of employers believe their workers’ financial problems have a large or some impact on their performance.
Ms. Dill said retirement isn’t the only money concern on the minds of workers. Young workers are worried about paying off student loans or saving for their first home. Older workers’ concerns include saving for their children’s education or for long-term care.
For many, the struggle of living paycheck to paycheck is the biggest cause for concern.
“It’s really become evident that people are struggling with a lot of other things” besides retirement, she said.
Mercer categorizes the worriers according to their financial wellness, which the firm based on a person’s ability to pay bills, how much debt is being carried, how stressed the individual is about money, and the ability to handle a health-related problem or some other unexpected expense. The greater their ability to pay their bills and cope with unexpected expenses, the higher their financial wellness score.
Among people with low financial wellness scores, Mercer’s survey found that over 40 percent spent 20 or more hours a month on the job worrying about finances, Ms. Dill said.
But she said on-the-job worries about finance are also a problem among those with higher financial wellness scores. About 10 percent of them spend 20 or more hours on the job each month worrying about finances, Mercer found.
Ms. Dill notes that financial stress also can cause health stress, which compounds the loss of productivity related to on-the-job worries about money.
She recommended employers find out which kinds of financial worries pose the biggest risks to productivity and tailor employee assistance programs accordingly. For some, that could mean providing budgeting assistance to workers who are living paycheck to paycheck, she said.
Ms. Dill said it is also important for employers to build employees’ confidence in making financial decisions, a concept Mercer calls “financial courage.” The more financial courage that employees have, the more likely they are to take advantage of programs employers offer to assist workers with financial issues, she said.