A new study reveals the productivity and revenue losses financially stressed employees are costing Australian businesses.
AMP’s 2016 Financial Wellness report found financially stressed employees lose an average 6.9 hours of productive work per week, and are absent 1.3 hours per week due to stress-related illness.
“Financial stress is a common occurrence in the Australian workforce, with more than 2.8 million employees, representing one in four workers, under financial stress in 2016,” says Vicki Doyle, director of corporate superannuation at AMP.
Doyle highlights financially stressed employees are costing Australian businesses $47 billion in lost annual revenue.
“People who experience financial stress are more likely to be unable to work due to stress-related sickness, which can affect their health and morale in addition to lowering workplace productivity,” Doyle notes.
Workers in accommodation and food services were found to have the highest number of financially stressed people (35%), followed by healthcare and social assistance (32%), administrative services (31%) and retail employees (26%).
“In addition to the personal impact of financial stress, we're also seeing a significant impact on business owners and operators through lost productivity and employee absenteeism, which is particularly high in the hospitality and healthcare industries,” adds Doyle.
The report shows the top trigger for financial stress is bad debt (50% of stressed workers). Other contributors include the need to save for retirement (35%), providing for their family (34%), missing bills (32%) and making mortgage repayments (22%).
According to the study, casual workers are more than twice as likely to experience financial stress compared to full-time or part time workers. “Fifty-four per cent of casual workers are financially stressed compared to 22% and 27% of full time and part time workers, respectively,” it notes.
Low income is also a source of financial stress, with 34% of people earning less than $50,000 per annum under stressed, however, the number of high income earners that are financially stressed is on the rise, growing from just 8% in 2014 to 16% in 2016.
Brisbane topped the table as the most financially stressed city (30% of workers), followed by Adelaide (25%), Perth (23%), Sydney (20%) and Melbourne (19%). Darwin (18%) and Hobart (16%) were the least financially stressed cities.
The report also highlights a drop in the number of people who are confident in their finances, which fell from 54% in 2015 to 48% in 2016.
And with 80% of the workforce indicating they have financial goals in mind, yet just 18% having a defined plan to achieve these goals, what can employers do to assist in the financial wellbeing of their employers?
“Employers can help their employees to bring clarity and shape to their financial goals by supporting financial wellness in the workplace,” advises Doyle. “If employees have well-defined goals and a plan to achieve them, they are less likely to experience financial stress, helping them to be more productive.”