Philip was a brilliant employee. In his heydays, during the end of month reporting, he would hop from desk to desk assisting his other graduate colleagues to complete their report schedules, his being a non-graduate notwithstanding.
Then, he all of a sudden started having too many visitors. There would be people waiting for him at the reception when he is turning up for work, others calling him on phone and others waiting for him during his numerous cigarettes breaks that kept increasing. In fact, this was happening around the same time when the government passed the no smoking zone rules and all areas in our organization were declared nonsmoking zones. Smokers had to troop out into the street and into the designated county smoking zones.
He was an easy target; the visitors knew that he must come out in less than two hours to go and have his puff.
Fast forward, in less than 2 years, he had lost his job and sitting with him a few months before his eventual demise last year because of drug abuse-related complications, his story was sad as it was a learning point for me.
Many employees are struggling financially and statistics show that 80% of workers are living paycheck-to-paycheck. That causes them financial stress and creates problems for employers as well.
Whether it’s car payments, mortgage/rent payments, credit card debt, an unexpected expense or some other financial matter that they are worried about, employees are spending time at work on these issues rather than concentrating on the job they are being paid to do.
Philip started off as a contractor and worked his way up to the rank of a manager in 7 years. At the junior levels, he held his expenses and was comfortable and happy. “My problems started when I became a manager. Other employees looked up to me and I had to look the part. I decided to get a car on loan and moved to a 2 bedroomed house in South B. My expenses just tripled. In addition, a lady I had been eyeing got close to me and I had to act that boyfriend of power”, an intoxicated Philip told me between sips of his favorite Pilsner.
“This meant that I had to start borrowing. Gradually, paying back required that I borrow from someone else to pay another one. In no time, my salary was not able to cater for the interest and all over a sudden, I was drowning in debt. Sometimes I had to sneak out of the office or absent myself completely in order to get away from a nagging shylock. I hid this from my girlfriend who worked with me in the same organization.
In no time I had no time to complete my work at work or I just could not get myself to think about work. I kept worrying and wondering which of my creditors had come for me and I felt suspicious all the time. I resorted to drinking local brews to help me with my panic attacks because they were cheap.
My girl eventually learned of my problems from prying colleagues and left me, exacerbating the situation. I eventually was fired.”
Philip is not alone, In fact, according to Price Water-house Coopers PwC’s 2018 Employee Financial Wellness Survey, some 43 percent of employees spend three or more hours each week in the office thinking about or dealing with their personal financial issues. That’s 150 hours of lost productivity per year per employee who is sidetracked from doing their work because of financial stress.
Financial stress significantly affects employee mental and physical well being. This translates into higher health-related costs and significantly reduces productivity. Financially stressed employees often
- Absent from work frequently feigning sick or genuinely using sick leave and leave days to stay away.
- Low productivity. Although employees are physically at work, they spend time on activities unrelated to their jobs, such as managing creditors.
- Health concerns. Constant financial stress leads to health issues which leads to lower productivity and poor quality of work. This brings higher health costs both to the employee and the employer.
- Foul Mood at work. Distress over financial matters can contribute to irritability, anger, fatigue and sleeplessness.
- Work conflicts. Tardiness, incomplete work tasks, and accidents result when workers’ personal issues interfere with their job performance.
How to spot employee financial stress
Four common signs that occur in the workplace may be signals to employers of a financially-stressed employee:
Maxing on loans and frequently topping up on their loans.
Frequently asking for payday advances.
Unplanned leave. Like Philip, an employee who keeps asking emergency leave could be hiding from creditors or does not have money to handle unexpected expenses like a broken-down car.
The inability of an employee to handle preventable medical issues like dental checkups etc that then blows up into large medical issues. this could have been avoided through preventive care that was unattainable because the employee was broke.
Today’s employees need to have financial literacy. Financial literacy is the ability to manage expenses and make everyday life affordable by making their money do more – following a monthly budget, being wise shoppers and taking advantage of employer-offered financial wellness tools and voluntary benefits.
What can employers do
- Financial education; by scheduling financial education in their annual employee welfare activities, this education can help staff with money management including budgeting, saving, investing and debt reduction. In order to be effective, however, financial education at work needs to be more than just an information session that only outlines the features of the workplace savings plan and offers instructions on how to complete the necessary paperwork. This type of session is common but it does little to address the fact that, what most employees are desperate for is reliable information which provides them with the knowledge and confidence to manage their personal finances and plan for retirement.
- Negotiating group voluntary benefits that provide employees the opportunity to access discounts while shopping starting from car insurances, to property insurance to store discounts using credit cards, etc.
- Allow payroll deductions for employee savings into saccos and also some select debt repayments.
- Low-interest installment loans and credit that help employees avoid payday loans and cash advances from credit cards.
- Automated savings programs that encourage employees to save money each month from their paycheck.
- Bill payment programs that empower employees with debt paydown strategies and the ability to make recurring bill payments on-time each month through payroll deduction.
Financial Education does not have to be complicated or expensive, focus on finding an advisor with a sincere desire to help others and an interest in demystifying the world of saving and investing. Then, let their expertise bring added value to your plan and your employees because when employers help employees with their financial wellness, it pays off in less stressed employees who are more productive workers who are able to increase their employers’ bottom line.
Click here to find out more of how you can assist your employees financial wellness for free.