How Employee Burnout & Financial Stress Can Hurt Your Business

What if the biggest challenges in your business had nothing to do with your competition or issues like supply chain management? Even before COVID-19, companies were starting to see how employee burnout and financial stress were causing problems in the workplace. Increased stress leads to less productivity and unhealthy employees. That combination can devastate any company, but it can be particularly detrimental to small businesses.

Here’s a closer look at how financial problems can cause employee stress that ultimately harms businesses, as well as some tips to help your company and employees avoid these problems.

Employee Burnout is More Prevalent Than You Think

American companies are full of burned-out employees. Consultant group Deloitte shared that 77% of workers reported experiencing employee burnout at their job.

Burnout occurs when employees feel overwhelmed and drained. As a result, they have trouble keeping up with the requirements of their job. Constant employee stress and mental exhaustion can cause serious health problems.

Burnout stems from several different areas, including people feeling a lack of support or recognition from their managers. Deloitte also cites unrealistic deadlines, unfair expectations, and unhealthy work schedules as contributing factors.

All this stress creates serious problems at work and home. In fact, 91% of respondents told Deloitte that the stress impacts their work, and 83% say it affects their personal relationships.

How Companies Can Help Employee Burnout

It may be impossible to eliminate employee stress in a company, but that doesn’t mean that worker burnout shouldn’t be addressed.

The obvious place to start is with workplace culture. If you run a hard-driving business that requires employees to work long hours, deal with constant deadlines, and handle pressure, there’s a good chance you have burned out employees on your team. And whether you realize it or not, their work productivity is suffering.

If this scenario sounds like your business, it might be time to redefine your values and make sure the company culture aligns with your operations. Your managers should recognize and support your employees. Worker expectations don’t have to be low, but they should be reasonable. Additionally, employees should be taking vacations and not working extended hours on a regular basis.

Creating a mental health plan, like an Employee Assistance Program (EAP), is also a proactive way to deal with employee stress.

Financial Stress Hurts Worker Productivity

According to the nearly 1,700 workers surveyed for PwC’s 9th annual Employee Financial Wellness Survey, 54% of respondents said financial matters caused them the most stress. More people have financial stress than relationship, job, and health stress. Based on those figures, it’s clear that employee financial stress is a major problem for companies.

Employees are stressed out for a good reason. According to the survey, 38% said they don’t have $1,000 saved to deal with unexpected expenses and the Federal Reserve  found that 37% would have difficulty covering a $400 unexpected expense.

Financial stress causes problems for employers and employees alike. While companies grapple with high turnover and decreased productivity, workers experience sleep issues, depression, panic attacks, and general distraction at work. It costs businesses $500 billion per year according to Salary Finance.

Ways to Help Employees with Financial Stress

Since it’s probably impossible to give every employee a raise, businesses need to find alternative ways to help with financial stress.

The first solution is for a company to implement on-demand pay, also known as earned wage access (EWA). With an EWA program, employees get instant access to wages they have already earned rather than waiting to collect their paycheck. For a small fee, the employee can request money and receive it when they need it. This access can help employees pay their regular bills or cover emergency situations.

On-demand pay can also be used as a great recruiting tool as 79% of employees would change employers to one that offers it.

In addition to offering on-demand pay, businesses can also create financial wellness programs that educate employees on financial matters like managing credit and paying off debt. There are also retirement plans, adult care, childcare, and healthcare, and student loan repayment plans that offer practical help for employee finances.

It’s no secret financial stress and worker burnout cause problems for employees and companies. It falls on the employer to figure out how they can better support their employees. Healthier employees with less financial stress are routinely more productive. That is why businesses need to consider various programs to help ease the financial stress their employees experience.