Keeping employees happy is one of the biggest challenges facing companies today. More than that, it is a necessity. In the end, happy people produce more and hardly look for opportunities elsewhere.
Among all the factors that impact on happiness at work, one of the most important is to observe how the Financial stress increases employee turnover.
In this article you will see what financial stress is and why it influences organizations' daily lives. We will also bring tips to solve the problem and maintain the quality of life in your company at a high level. Want to know more? Stay with us!
What is financial stress?
Financial stress is the mental strain that occurs as a result of debt and mismanagement of money. The concern with bank balance, accounts payable and interest on loans triggers a series of problems in personal and professional life, such as changes in mood and lack of focus.
According to a US study, cash is the main cause of stress for 64% of Americanss. Between the millennials adults, between 18 and 35 years old, the rate is even higher: 75% do not have full control over personal finances.
Therefore, reducing the financial stress is to solve a particular need of employees.
Having the bank account under control exponentially increases the quality of life, which results in more mental and physical health. All of this brings enormous benefits to the company, as we will see later.
What are the impacts of financial stress on employees?
To understand how Financial stress increases employee turnover, it is necessary to observe what are their impacts on the team's routine. Here are some of them.
Who passes by financial stress lives in a state of constant concern.
While debts run and interest accrues, the person does not sleep well, has mood swings and loses the ability to concentrate.
All the person thinks is: “How am I going to be able to pay these bills?”.
Drop in productivity
With constant concern, the professional is unable to put 100% of his focus on work, which leads to drop in productivity.
Often the person spends office hours solving problems with money, setting aside their day-to-day tasks. And in the moments when you try to carry out the activities, the results leave a lot to be desired.
Such facts are supported by numbers. In a survey by Society for Human Resources Management, 83% of HR professionals stated that the Financial stress undermines employee performance.
THE drop in productivity it is even one of the reasons why financial stress increases employee turnover.
When performance drops, many managers decide to shut down the professional before even assessing the causes of the problem.
As a result, turnover increases, as do the costs of recruiting, selecting and training new employees.
Lack of motivation
In many cases, financial problems generate a high dissatisfaction with salary.
The person feels discouraged because he thinks he is getting less than he could, and starts looking for opportunities in other companies.
This is one of the main explanations for how the Financial stress increases employee turnover.
The good news is that this can be prevented. HR and leadership must observe the employee's behavior and act quickly when identifying the problem.
When there is dissatisfaction with the salary, consider the professional's results to study an increase. It may be that the person's remuneration is really behind schedule.
If this is not the case, talk to the employee and point out the path he should take to earn a higher salary.
Make it clear that the readjustment is linked to results, and that the person can achieve it if he / she performs well in his / her role.
We already know that the Financial stress increases employee turnover, But not only that. The problem can also generate growth in absenteeism rate, that is, in the number of absences and delays.
When the mind is not well, the body takes the toll. Excessive worry can cause hypertension, insomnia and make the person more distracted and vulnerable to accidents. With so many risks, the chances of the employee needing to leave for medical reasons are much greater.
How can HR deal with financial stress?
To guarantee the quality of life of the employees, HR must work together with the leaders to set up a financial welfare program. This type of initiative has already had great results in many organizations.
According to the Hay Group, companies that invest in these programs have teams 43% more productive. According to the Gallup, avoid the financial stress of professionals reduces turnover by up to 51%.
But how to implement an efficient financial welfare program in the company?
The most common alternatives take place on two fronts. Check out more details about them below.
Promote the financial education is an excellent way to increase quality of life for employees.
It is possible to structure a multimedia educational content, with the use of videos, texts, audios and even interactive games focused on personal finances.
In this case, the targeting must be done according to the needs of the employee. Thus, those who have a saving profile will not receive the same tips as those who are managing debts, for example.
Another good alternative is expert guidance. These coaches can teach employees the importance of set up a monthly budget, keep track of expenses and build an emergency reserve.
After covering the basics, you can even offer courses on investments and more advanced subjects later.
Pay per day
One of the big trends in the market to avoid financial stress is to offer payments per day.
In this system, the remuneration is available for redemption at the end of the working day. Thus, it is not necessary to wait for a specific date to have access to the monthly salary.
This may be the solution that a person needs to pay a bill on time and avoid loans, for example.
In this way, the professional has much more control over his own money and avoids falling into financial traps.
Now that you know how financial stress increases employee turnover, how about putting what you've learned into practice?
Observe the behavior of employees and implement a financial well-being program in the organization. Thus you will be able to guarantee the quality of life of the team and a low turnover in your business!
If you liked the article, follow us on social media and follow our content first hand! We are on Facebook, Instagram, Twitter and LinkedIn.