This problem is costing employers billions every year, only 30% recognise it
Financial worries are costing employers billions a year in lost productivity, low employee retention rates and recruitment costs, and many aren’t paying attention to it.
We all know what it feels like to worry about money. Almost half of us find money worries to be the most stressful part of life (PWC).
With money worries causing so much stress, it’s no wonder that they can have an impact at work.
A survey from Buck found that, although 30% of employers recognise the negative impact of financial issues in the workplace, not one of the respondents was actively measuring this factor with their staff.
We’re not strangers to seeing stories about the declining productivity levels in the uk. Better understanding of financial worries may make the issue easier to quantify and address.
48%* of people are distracted by their money worries at work *PWC
38%* of workers can’t sleep at night due to money worries *Equifax/YouGov
28%* of people spend time at work dealing with their finances *Money and Mental Health Policy Institute
Financially stressed employees are 5x* more likely to take time off to deal with personal issues *PWC
It’s clear that by helping employees to tackle their money worries, you’re going to be able to reduce financial stress and keep more minds on the job.
The impact of money worries on productivity is so large that CEBR states that businesses are losing up to £1.56 billion a year through absenteeism and presenteeism caused by financial issues.
Any dent made in this area could be hugely beneficial not just to employees’ lives, but to productivity.
Employee retention rate
The average employee retention rate for businesses in the UK is 85% (Deputy). To put a figure to how much this is costing, we’re going to look at a business with 5,000 employees.
With a turnover rate of 15%, a business with 5,000 employees will be losing up to 750 of their employees every year.
A study by Oxford Economics found that the average cost of recruitment per member of staff in the UK to be a whopping £5,433. This may seem high. But when broken up by advertising, recruitment agency fees, temps, and interviewing and training it becomes a lot more reasonable.
For a business with 5,000 members of staff, losing 750 people, recruitment is costing them, £4,074,750 every year.
What part does financial resilience play in retaining staff?
There are many reasons why employees leave their jobs. They’re often largely unknown to the employer. This is part of the reason why long-term retention is so hard to get right.
What we do know is that 75% of employees say that they are more likely to stay with their employer for better benefits (Willis Towers Watson). What’s more, 70% say that they would like more support from their employer when it comes to their finances (AON).
By focusing on financial issues, one of the key stress factors, employers can look to build a stronger relationship with their staff. This well then help to overcome employee retention issues in the process.
And we’ve found this to be true. Organisations supporting the financial lives of their employees with Wagestream have seen up to a 16% reduction in the number of leavers from their business.
For a business with 5,000 staff and average turnover of 15% per year, they could save up to £651,960. That’s £1,786 everyday.
With the potential for such results, financial wellbeing of staff should be at the top of your business agenda.
To find out why the financial resilience of your staff is more important than ever, click here.
For more information on how you can achieve up to 16% reduction in attrition, get in touch.