The business costs of employee financial stress

The business costs of employee financial stress

Although stress is a natural and normal part of life, financial stressors can interfere with the ability to focus, perform, and succeed at work. An American Psychological Association (APA) survey revealed that over 70% of adults in America are stressed about finances, and over 75% live paycheck-to-paycheck. 

Even though financial stress is so common, it’s something that employers should be genuinely concerned about. For many people who worry about money, their financial situation becomes much more than something they fret about at home or only during “off” hours. Financial worry can cause issues with motivation, drive, and even workplace morale. 

In short, employee financial stress isn’t just an individual problem; it’s a business problem, too. It can lead to a decline in motivation, engagement, and productivity. Financial anxiety can also increase turnover in your organization, costing you time and money in hiring and training new talent. As an employer, you have the power to significantly reduce financial stress in your employees’ lives. Addressing employee financial well-being concerns improves business outcomes, boosts employee motivation and engagement, and saves your organization on turnover costs. 

Understanding financial stress — what causes it, how it affects employees, and its impact on your businesses — is the first step. Continue reading to discover proven strategies you can implement to reduce the impact of financial stress on employee productivity and other issues in your workplace.

What is financial stress?

Financial stress causes anxiety about strained money situations. People who worry about bills, mounting debt, or uncertainty about their future might have financial stress. They might be worried about savings, debt, student loans, or even things they feel they have no or little control over, like inflation and the cost of gas and groceries. 

Financial stress can negatively affect both mental and physical well-being, causing issues like sleep disturbances, weight loss, mental health concerns, troubled relationships, decreased productivity, and an inability to function. 

Causes of financial stress among employees

The American Psychological Association’s (APAs) most recent Stress in America survey found that money-related stress is at its highest level in nearly a decade. Of those surveyed, 70% reported that the economy — specifically inflation, unemployment rates, etc. — is a massive source of stress for them, and 40% said “finances/money” is the most significant source of stress in their life, making it the top-ranked culprit. 

There are several causes of financial stress your employees might experience. Factors that can contribute to financial instability might include things like:

  • Low pay
  • High debt that’s difficult to pay down
  • Low or no savings
  • Unexpected expenses like car or home repairs
  • Student loans
  • Medical or legal bills
  • Lack of financial literacy and financial education
  • Stress about the future
  • Worry about dependents’ futures (college savings, generational wealth, etc.)

The dual impact of employee financial stress

While financial stress can wreak havoc on personal lives, most people find it also trickles into other aspects of life, like work. Research suggests that up to 78% of people with high financial stress feel that stress in the workplace when they’re working.  

How does financial stress impact employees?

High levels of employee financial stress can significantly reduce job satisfaction, productivity, engagement, and focus. Even worse, poor employee financial well-being can lead to physical and mental health issues that may result in higher absenteeism rates, missed pay, and increased healthcare costs.  

“For many of us, finances can be a significant source of stress. This can be due to various factors such as debt, unemployment, or the inability to obtain basic needs. This stress can lead to anxiety, depression, and other mental health issues. Financial instability can also affect relationships and our overall well-being.” - Talkspace therapist Bisma Anwar, LPC, LMHC

Reduced job satisfaction 

Financially stressed employees often don’t feel satisfied in their role or company, especially if that stress stems from low wages or lack of opportunity for advancement that might improve pay. Pay is directly linked to how valued people feel, so it makes sense that financial stress can affect job satisfaction. 

Reduced productivity

Productivity depends on mental clarity and energy, so when people are worried about their finances, it makes sense if it’s difficult for them to concentrate on their jobs with every looming financial concern. Continuously being preoccupied with money stress can lead to lower productivity metrics, influencing job security and potential for advancement. PwC’s Employee Financial Wellness Survey found that 1 out of 5 employees believe financial worries have negatively influenced their productivity level at work. 

Low engagement 

A significant part of adult life is spent at work. Not being engaged can weigh heavily on both emotional and physical well-being — but stressing over money makes it hard to feel engaged in anything, especially a job. Money stress can also make it difficult to be enthusiastic about things like team-building and social activities, further impacting overall workplace morale. 


Focus is essential to doing any job well. Any stress — including financial — can interfere with staying focused and completing work tasks. 

Physical and mental health issues

That old saying stress is a killer is backed by research. Countless studies show that stress can harm the body and mind. In addition to the increased risk of anxiety and depression, the American Institute of Stress notes financial stress can cause irritability, mood swings, fatigue, and a host of other emotional health strains.

Chronic stress can also contribute to physical health conditions like heart disease, digestive issues, sleep disturbance, high blood pressure, headache, stroke, muscle tension, and more. 

How does employee financial stress impact businesses?

When employees aren’t engaged at work, employers can see and feel it. Research shows a strong connection between employee engagement and performance. This can impact profitability, organizational growth, and company culture.  


Reducing financial stress in your workforce can directly enhance how profitable your company is. When employees aren’t preoccupied with money worries, they can fully focus on their jobs. Ultimately, reducing the impact of financial stress on employee productivity might increase profits for your business. 

Organizational growth

Growth relies on maintaining an engaged, productive team. Most organizations with distracted, stressed workforces find they spend valuable time managing the repercussions that follow rather than working on growing their business.

Company culture

Company culture affects job satisfaction, turnover rates, and brand reputation. When your workforce is unhappy, the ripple effect can touch every aspect of your business. Some studies suggest that when employees are worried about money, they’re up to 9 times more likely to not get along with others in the office. They’re also twice as likely to actively seek other employment.

How employers can reduce financial stress in the workplace

While all this might seem overwhelming, there are various easy ways for how employers can reduce stress in the workplace. Try focusing on the opportunities you have to reduce financial stress in the workplace and improve both your employees’ lives…and your business. 

Tips to reduce employee financial stress include:

  • Offering competitive salaries
  • Providing an employee financial wellness program
  • Increasing transparency about compensation and promotions
  • Enhancing retirement benefits
  • Offering bonuses and profit-sharing plans
  • Providing access to financial advisors
  • Offering emergency financial assistance
  • Conducting regular salary reviews

Offer mental health support to ease employee stress

If you see a trend of employee financial stress or think there are any other mental health needs in your workforce, offering online therapy for employees can be a game-changer. 

Talkspace is an online mental health platform that makes getting help easy and convenient — not to mention affordable. Partnering with Talkspace can be instrumental in helping your employees learn to manage life stressors stemming from financial, marital, self-esteem, or self-worth issues, a lack of organizational skills, or professional relationship struggles.

Learn more about how Talkspace can become part of your comprehensive mental health benefits package. Online support is convenient, so getting help is simple.

Request a demo today to see how Talkspace can help your employees manage financial stress or anything else they’re struggling with. 


  1. “APA Survey Shows Money Stress Weighing on Americans’ Health Nationwide.” 2015. American Psychological Association. American Psychological Association.  
  2. Johnson, Angela. “76% of Americans Are Living Paycheck-to-Paycheck.” CNNMoney. Cable News Network. June 24, 2013.  
  3. “APA 2023 Stress in America Topline Data.” 2023. American Psychological Association. APA.  
  4. “Better for Employees, Better for Business: - Amazon S3.” 2024. Morgan Stanley. Accessed April 14, 2024.  
  5. “PWC’s 2023 Employee Financial Wellness Survey.” 2024. PwC. Accessed April 14.  
  6. “How Stress Affects Your Health.” 2022. American Psychological Association. American Psychological Association. October 31.  
  7. Heckman, William. “Income Loss, Financial Stress, and Covid-19.” The American Institute of Stress. November 17, 2020.  
  8. “The Benefits of Employee Engagement.” Gallup.Com. Gallup. March 7. 2023.  
  9. “Inside the Wallets of Working Americans .” 2020. Gallup.Com. Gallup.

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