Employee financial wellbeing is more than a nice-to-have initiative. Not only does it impact employee engagement; it also affects productivity and the likelihood of workers staying in their role. Let’s explore exactly how, and what it means for employers, with insights from senior HR and wellbeing experts.
After several years of rising living costs, financial worries are taking a major toll on employees across the UK and Ireland.
A total of 2.9 million households fell into financial difficulties between 2021 and 2024. This brought the figure up to 39% of households struggling to make ends meet.
In a survey of 2,500 workers, 77% reported experiencing financial stress and worry over the last 12 months.
But what does this mean for employers?
Financial worries aren’t left behind when colleagues turn up (or log on) for work. Quite the opposite.
There’s plenty of strong evidence that employee financial wellbeing directly affects attendance, productivity, engagement and retention.
Attendance is lower
At least 10% of financially stressed employees admit to needing more time off work as a result (Zellis 2023)
Absenteeism due to financial stress costs UK employers £2.5 billion per year (CEBR/Aegon 2021)
10% of employees missed days at work (5 days each on average) due to taking time off to manage financial concerns (CEBR/Aegon 2021)
Productivity and performance suffer
Money worries can reduce concentration and decision-making skills severely, with an impact similar to losing 13 IQ points (Financial Times/Wagestream 2024)
33% of workers noticed a decline in their productivity when experiencing financial worries (PWC 2023)
61% of financially stressed employees under 35 say it has reduced their productivity at work (Zellis 2023)
Employee engagement falls
Employees spend nearly 14 hours a week stressing about finances, over half that time (8.2 hours) during work (CFO/SoFi 2024)
45% of employees facing financial stress feel tired at work, while 35% are less able to focus (Zellis 2023)
Retention and recruitment get harder
83% of employees would be more likely to stay with an employer that provided financial wellness programmes (Prudential 2018)
So, employers who promote and support employee financial wellbeing will reap significant rewards.
Why should employers take an interest in their people’s financial wellbeing?
We posed this question to a roundtable of financial wellness experts in a roundtable hosted by Zellis.
They all agreed that finding ways to support financial wellbeing at work would pay dividends for employers in the form of healthier, happier, and more productive employees.
Emily Trant, Chief Impact Officer for financial wellbeing company Wagestream, said:
“Sometimes we think about financial wellbeing and conflate it with financial health, which is a component of wellbeing. But it’s not the same as wellbeing, which is [about] getting pleasure out of life, and there’s a lot of people… who say they’re surviving, not thriving.”
A key point here is the vital role financial wellbeing plays in overall wellbeing. For example, 45% of people who are worried about money lose sleep, which can have negative impact both physically and mentally.
Jacqui Summons is an experienced Chief People Officer and HR consultant who has worked at EMIS Health, Accenture, and GlaxoSmithKline.
“A very cyclical relationship exists between all pillars of wellbeing, but financial wellbeing tends to sit in the middle of that,” she explained. “So, I don’t think we can service wellbeing in the workplace properly if we aren’t also looking very seriously at financial wellbeing.”
How does employee financial wellbeing impact productivity?
To illustrate the link between financial wellbeing and productivity, Summons cited research by Barclays. This showed that poor financial wellbeing reduces employee productivity and performance, which in turn impacts the bottom line.
“We can…start to link people worried about money to the creativity, the innovation, the sales, that customer loyalty, all these different measures of a successful organisation. So, we can pretty confidently say that if we stop people worrying about money, if we can get people to feel more control and confidence…in their financial situation, it creates better business outcomes for employers as well.”
Jacqui Summons, experienced Chief People Officer and HR consultant
How does employee financial wellbeing affect behaviour?
Gethin Nadin is Chief Innovation Officer at Zellis and employee benefits platform provider Benefex. He is also an award-winning psychologist and best-selling author.
“If you’re not feeling comfortable, the fact you’re not going to be sleeping well and aren’t as productive will have an impact on your colleagues. It’s not likely just to impact you. It’s also likely to be impacting the team.”
Trant agrees. “[Financial stress] not only impacts your ability to make good decisions. It also impacts your impulse control,” she said.
“So, whether you shout at a customer, or take it to wider society and go home and shout at your kids, or whether you make a rash decision about something, it’s really, really fundamental.”
This chimes with the fact that people experiencing financial stress say it creates communication problems and conflict at work (Zellis 2023).
How does supporting financial wellbeing help retention?
Supporting employee financial wellbeing can play an important role in retention. Beyond the salary, what makes a difference is access to budgeting tools and resources, payroll-linked savings, and education to help them understand their pay and what benefits are available to help it go further.
Nadin explained: “If you’re being delivered something which you’re using in your everyday life and it really makes a difference, it gets to the point of ‘Well, OK, I could go and work for that company and I may get slightly more money, but I really like what’s being provided by this organisation’. So, I think it really does help in terms of retention.”
This is particularly true if employers offer unusual but highly prized perks that give them the edge. He cited one customer that has just started rolling out fully-paid-for private medical insurance for every employee, regardless of salary or position.
“All of a sudden, employees of a certain age or with certain conditions are going to gravitate towards this employer and will stay with them for longer,” Nadin said.
“If you work for an organisation that you really believe cares about you, I don’t know why you’d leave.”
Conclusion: Help to build a successful and resilient organisation
Emily Trant rounded off by reiterating the benefits of supporting financial wellbeing, boosting retention, and keeping valuable and experienced employees:
“When you retain a workforce for longer, you have that increased maturity and increased productivity overall, so it becomes a virtuous circle.”
In other words, if employers are prepared to help with their workforce’s financial wellbeing problems, everyone benefits, including themselves.
Gethin Nadin concluded, “The organisation gets better, the individual employee gets better, and it starts to create a snowball effect. Engagement is boosted, collaboration is boosted.
“And you start to see that getting this right is a really, really important part of creating a successful and resilient organisation for the future.”
Key takeaways
Financial stress significantly hits workplace performance: 76% of financially stressed employees reporting negative consequences on their work.
Poor financial wellbeing costs UK employers £2.5 billion annually through absenteeism. Affected employees take an average of five days off to manage money troubles.
Financial stress can have a major negative impact on decision-making, impulse control, and workplace relationships.
Employees spend more than eight of their working hours a week worrying about finances.
Supporting financial wellbeing through benefits and programmes can give employers the edge in employee retention
Up to 83% of employees would be more likely to stay with an organisation that provided some financial wellbeing help.
Watch the roundtable on financial wellbeing and productivity
Blog
Case Studies
Downloads
Podcasts
Events
Press and Media
Webinars
Newsletter
