How Employers Can Help Ease Financial Stress

Many stressors have taken center stage in today's fast-paced, always-on world. These include work stress, family stress and pandemic stress, with associated concerns ranging from the health and safety of your family to kids' education to an unpredictable economy.

Of the many challenges the pandemic has brought on, increased financial stress is one that is likely to stick around. Money has always been a pressing source of concern for employees, ranking as the top stressor according to PwC. What many don't realize, however, is that this heightened financial stress can take a toll on not only financial health, but also physical and mental well-being.

Physical and mental health is deeply linked with financial stress. A study from Northwestern University found that adults 24-32 years old with immense debt had higher diastolic blood pressure. In addition, stress can lead to other negative physical symptoms, from headaches and fatigue to mental symptoms such as feeling sad or overwhelmed. Similar links can be found with stressed employees using more sick time and sometimes even neglecting medical treatment because of financial concerns. 

With the resurgence of the pandemic throughout the country, its impact on employees’ physical and mental health rages on. According to BrightPlan’s 2021 Wellness Barometer Survey, 65% of employees are stressed about their finances and 81% of employees reassessed their financial situation due to the pandemic. This trend doesn't bode well for employers as they are dealing with managing a hybrid or remote workforce and looking for ways to keep employees performing at their best. Rising financial stress can create a downward spiral on employee well-being and, ultimately, impact employee performance and the company as a whole.

Employers have the opportunity to take the lead and make a difference. Companies have been focused on keeping their employees safe since the onset of the pandemic, from enacting widespread work-from-home policies to mandating vaccines for those returning to the office. The BrightPlan survey shows that 91% of employees think that their companies and HR teams handled the pandemic well. 

Helping relieve employees of their added financial stress is the next step for employers to take charge of supporting their employees' well-being. Financial wellness is not a nice-to-have benefit — employees are demanding it. Financial wellness benefits are ranked as the third most important benefit by employees after healthcare and remote work.   

So what can company and HR leaders do? To begin with, employers can take a hard look at their benefits packages to ensure they are offering the right tools and resources to help employees work through their financial stress and plan for their futures. For example, walking employees through complex financial situations, such as competing priorities around paying off debt, buying a house, building an emergency fund and saving for retirement, can help alleviate some of the stress employees feel due to the pandemic.

It's important for employers to take a hard look at what benefits matter most to employees. Some companies have returned to the office or implemented hybrid schedules, but many have postponed their plans and remained remote. Rather than focusing on what can be done to help employees stay engaged at the office, companies need to shift to focus on enabling all their employees to reduce distractions and productivity-blockers — such as stress.

Providing a mix of digital and human financial wellness tools and resources as part of a wider benefits package is a tangible way employers can help ease financial concerns and empower employees. For example, companies can offer a holistic financial wellness program that addresses the four key areas of personal finance: financial education, financial planning, investing and day-to-day money management. For instance, when an employee is stressed about paying down student loans, they can first learn about the intricacies of how student loans work, plan out their debt-repayment strategy, refine this plan with an experienced human financial planner, and leverage automated budgeting to ensure their day-to-day spending is on track to meet their debt reduction goals.

With the future constantly changing, it’s no surprise that employees are stressed about finances. Yet few of us appreciate the direct connection between this stress and physical and mental health. By addressing this under-appreciated link, employers can positively impact their people’s financial stress, creating healthier, happier and more engaged employees. With the prolonged uncertainty posed by the pandemic, employers are uniquely poised to forge deeper connections with their employees by helping improve the financial security of their people and their families.