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How employee financial stress impacts your business

Thomas  Charla

Posted on January 08, 2019

Thomas Charla is an expert in financial planning and wellness as well as business markets for MassMutual.
Young office workers of various races sitting around messy conference table

Surfing the Internet. Gossiping by the water cooler. Taking frequent coffee breaks. You can’t miss these obvious workplace productivity killers. If you’re a business owner, chances are you’re already addressing these workday disruptions.

However, you may not recognize a hidden distraction that could be impacting your bottom line: Your employees’ financial stress—their concern over their current and future financial well-being.

A sizable portion of your workforce may be feeling the strain. Up to 30 percent of employees report that personal financial issues may cause them to be distracted at work, according to the PwC 2017 Special Report: Financial Stress and the Bottom Line.1 Not having enough savings may be one reason for the distraction. Whether it’s a medical bill, car repair or another financial setback, 40 percent of Americans nationwide don’t have enough cash on hand to cover a $400 emergency expense, according to a 2017 report by the Federal Reserve Board.2

The ripple effects on productivity

Like any distraction, employee financial stress creates ripple effects throughout the workday and can negatively affect day-to-day operations in the following ways:

Decreased productivity and revenue: Of those financially distracted employees, 46 percent reported spending three hours or more each week dealing with personal financial issues at work, according to the PwC research. Or they missed work altogether. That’s wages you’re paying for work not getting done. For revenue-generating employees, such as a salesforce, that’s also potential revenue lost.

Strained workplace relationships: Supervisors, team members, and clients may notice employees who aren’t giving work their undivided attention. These employees may miss deadlines or their work quality may suffer, which may affect the team’s ability to get and keep business and clients.

Safety risks and preventable losses: In some industries, such as construction, manufacturing, or even high tech, workplace distraction can create hazardous situations. In the examination of the operations at a regional trucking firm, researchers found financial stress increased the likelihood of truck drivers having a preventable accident.3 These distracted employees inflated the company’s preventable traffic accidents by eight each year, with estimated related organizational costs at more than $1 million annually.

Effects on future planning : MassMutual’s 2017 Small Business Employee Financial Wellness study found that business owners believe more than 40 percent of their employees won’t be able to retire on time. Employees who are forced to delay their retirement because of personal financial issues could mean higher payroll and benefits costs in the future. Additionally, it may cause a delay in being able to implement your succession and exit plans.

When it comes to employee financial stress, business as usual isn’t an option. Addressing the root of the problem—poor employee financial well-being—through employee-focused financial education can help employees alleviate financial stress and set a course for a more secure financial future. What you get in return is a more engaged workforce focused on the business at hand and a brighter future.

Learn more from MassMutual…

Employee financial wellness: Have a game plan

Calculator: Key employee loss cost

Business owners: Gauging your exit readiness


PwC, “PwC 2017 Special Report: Financial Stress and the Bottom Line.” April 19, 2017


2 Federal Reserve Board, “Report on the Economic Well-Being of U.S. Households in 2017,” May 2018.


3 Organization Science, “The Price of Financial Precarity: Organizational Costs of Employees’ Financial Concerns,” Organization Science, October 2017.

The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual.