Employee Financial Wellness: A business strategy, not just a benefit
Picture this: One of your most engaged employees is stressed. They stare at their computer screen but can't focus on an important presentation due tomorrow. They’ve checked their bank account three times during the workday, trying to find any way possible to cover their upcoming student loan payment and an unexpected car repair bill. Last night, they argued with their partner about expenses again, causing them to feel tired and sad. During lunch, they call to cancel a doctor’s appointment they really shouldn’t delay, but another copay feels impossible. When you ask them to begin thinking about innovative ideas for the next big project, they simply nod and sink into their seat. Their creativity is completely drained by the mental math running in the background.
This isn’t an unusual day for millions of employees whose financial stress is affecting their focus, their health and their relationships.
The hidden cost of financial stress
Many organizations attribute recent productivity concerns to remote work challenges, outdated technology or trends like quiet quitting, but financial anxiety is a significant underlying cause that is rarely part of the discussion. In fact, financial stress is a widespread reality affecting both employees and employers, impacting more than three-quarters of workers across the United States. And while the connection between employee wellness and workplace performance is well-established, financial wellness remains a missing piece of the puzzle.
The connection between financial, mental and physical health
Financial stress doesn't exist in isolation. It can cause significant problems across every aspect of an employee’s life.
Mental health impact
Financial challenges and mental health problems feed into each other. A recent report from the TIAA Institute found that:
42% of U.S. adults report that money negatively impacts their mental health
Financial stress has been linked to a 34% increase in mental health issues
For many people, financial stress also impacts personal relationships with family and friends and relationships with partners. This can’t be overlooked given the significant impact relationships have on mental health.
Physical health consequences
Considering the toll that financial stress can take on a person’s mental health, it’s no surprise that the same connection extends to physical wellbeing. Data from a recent Financial Health Pulse® trends report found that:
Financially vulnerable individuals are far more likely to report poor physical health
34% of financially vulnerable individuals skip needed health care due to cost concerns
Nearly 3 in 10 financially stressed individuals take lower rates of medication than prescribed
This creates a negative cycle. Financial stress leads to poorer health outcomes, which in turn create additional financial burdens through medical expenses and lost work time.
What may seem like employees’ personal struggles can quickly transform into larger organizational challenges that directly affect your company's culture and performance. Understanding these connections helps reveal why addressing financial wellness is as much a business strategy as it is an employee benefit.
How employee financial stress impacts productivity
According to a survey from PwC, 76% of employees report that financial stress negatively impacts their work output. Financial worries don't stay at home when employees clock in. In fact:
56% of stressed employees were distracted by their money worries and spent more than 3 work hours per week dealing with their personal finances
One in three full-time employees admits that money worries have negatively impacted their work performance
These numbers show that money worries are quietly eating away at your team's productivity, how engaged they feel and ultimately, your company's growth and success. And the consequences of employee financial stress extend far beyond reduced productivity.
Increased absenteeism
When financial worries escalate, attendance suffers. Studies show there is a 34% increase in being late to or absent from work among financially stressed employees. This isn’t a surprise when you consider the impact financial stress can have on an employee’s physical and mental health.
Higher turnover
Employees experiencing financial challenges are more than distracted—they’re at risk of leaving your company. PwC’s survey found that 42% of financially stressed employees are twice as likely to be job hunting compared to those without financial stress. Today’s talent marketing is competitive, making financial concerns a very real threat to your company’s stability and institutional knowledge.
Widespread burnout
The mental toll of financial stress is even more alarming. Consider that 84% of financially stressed employees report feeling tired and burned out. This often manifests as presenteeism. An employee may be physically present at work, but mentally absent, decreasing efficiency and potentially even impacting team morale or safety.
The true cost to employers
When you quantify financial stress, it becomes very clear that it’s much more than an individual problem. Financial difficulties impact every aspect of an employee’s life, and that includes your company. In fact, 3 in 4 U.S. employers say workers’ financial stress negatively impacts operations. They report lower morale, a decrease in happiness at work, reduced productivity and an increase in mistakes.
For an organization with 500 employees, financial stress could quietly cost hundreds of thousands of dollars in productivity each year—a substantial hidden cost that rarely appears on financial statements.
Why EAP-based financial wellness programs are essential
Here's why financial wellness resources should be a non-negotiable component of your benefits package:
Productivity gains: Reducing the amount of time financially stressed employees spend managing money concerns at work represents an immediate productivity boost.
Reduced absenteeism and turnover: Integrating personalized financial wellness programs with other benefits addresses key drivers of absenteeism and turnover, helping organizations maintain continuity and reduce recruitment costs.
Improved overall wellbeing: By acknowledging and addressing the connection between financial, mental and physical health, comprehensive financial wellness programs deliver broader and more holistic health solutions.
Enhanced employee engagement: Employees who feel supported in all aspects of their wellbeing, including financial health, demonstrate higher engagement and loyalty.
Competitive advantage in talent acquisition: As awareness of financial wellness continues to grow, employers offering personalized, holistic financial wellness resources gain an edge in attracting top talent.
Moving beyond traditional financial benefits
Traditional financial benefits like retirement plans and health insurance are important, but in today’s economic environment, employees desire more from their employers. They want comprehensive financial wellness resources that address immediate concerns while also supporting long-term financial resilience.
Effective financial wellness programs delivered through EAPs provide:
Personalized financial coaching and education
Resources for debt management and building emergency savings
Tools for budgeting and financial planning
Support for addressing financial stressors like student loans
Navigation to additional forms of support, such as community resources
Integration with mental health resources to address the whole person
Financial wellness is a strategic business investment
The data speaks for itself. Employee financial stress affects key areas of your organization—from productivity and engagement to health and retention. Still, many employers overlook the fact that tackling financial wellness isn't just about offering education or tools. It requires supporting real behavioral change, which is exactly what makes EAP-delivered financial wellness programs so impactful.
When employees have access to personalized coaching and support through your EAP, they don't just learn better financial habits—they actually adopt them. This behavioral shift transforms financial education into financial wellness by addressing the whole person and creating lasting change that benefits both employee wellbeing and your business goals.
Additional resources
How Work-Life Services Support a Well-Rounded Workplace Mental Health Program
How Social Determinants of Health Impact the Workplace and What Employers Can Do To Help