Inflation has been on the rise, and recessions have been emerging since the pandemic. The traditional payment structure you know isn’t cutting it anymore. Expenses are also piling up, much like desk tasks, but salaries remain almost the same, either in value or amount.
According to a 2023 report by Bank of America, only 42% of employees feel well about their finances. This gap between rising living costs and barely moving wages doesn’t just stay at home. It appears at work and affects your employees’ productivity.
Financial stress affects work focus and morale. Your employees may miss deadlines, call in sick more often, or even start looking for new jobs that offer better pay or support.
As the HR professional, you need to identify these signals and proactively address the causes before they ripple across your organization.
In this article, we’ll discuss the signals to pay attention to and the things you can do to help your employees out.
How to spot when our employees are struggling financially
Most employees won’t approach you directly with their financial struggles. You need to spot some of them yourself.
Increased absenteeism and missed deadlines
Leigh McKenzie, Community Advocate at Traffic Think Tank, says, “Employees who have been initially punctual start calling up late. Meeting up with deadlines becomes a difficult chore. And they provide different cover-ups for their inability to meet up. Some might even miss the office or not show up at all. Usually, it starts with just one, but it suddenly becomes a recurring pattern.”
Requests for payday advances
Your employees might be in debt or struggling with expenses that exceed their budget. So, they reach out for payday advances, sometimes weeks or even days in advance. Some might ask for corporate loans. At the top of it all, they could process their 401(k) withdrawals.
Visible anxiety or irritability
Not every employee knows how to keep it in. You suddenly begin to notice a change in how they relate to others. They just want to get off their desk quickly, or they begin expressing stronger emotions. Sometimes, even the most conservative person might start losing their patience over things that never did matter before.
Declining productivity and poor performance
Financial pressure puts a strain on the mind. Affected employees begin exploring alternatives, reflecting on what they could have done differently to mitigate the current financial crisis. Some wonder if they should take up more roles within or outside the company. Some hope to renegotiate earnings. Work time is spent permutating options. And this affects productivity.
Opting out of events
Work gatherings are often meant to boost employee engagement. However, for employees who are financially struggling, public exposure may become a nuisance to them. They prefer their personal space, where they can explore their mind choices. So, social events, team lunches, or wellness programs start to feel more like obligations than opportunities.
Talking about financial strain
While most might keep to themselves, a few others might express their difficulty through casual responses. For instance, they might make random jokes about how “broke” they are, skip paid meals with phrases like “I can’t really afford this right now”, or even ask to pay late for team contributions in cases of events.
Why do you need to address this now?
When your employees are financially strained, they may start taking on multiple jobs or become burned out in a cycle of worry over their impending bills. Burnout results in not just office disadvantages but also personal harm to your employees. For instance, 23% of women suffer from insomnia due to financial stress.
Failing to pick up or address these signals early can quietly erode your organization’s productivity and increase employee turnover. You risk losing some of your best talent, and the ripple effect can sour your overall workplace culture. Even financially stable employees may begin to question whether the company truly supports its people when it matters most.
4 steps to provide financial support as HR
Knowing is not just enough. You need to swoop to the rescue as soon as you are aware. Here’s how:
1. Start the Conversation
Once you catch a whiff of one or more of these signals, don’t wait till they come to you. They might never do that. Instead, reach out. Message or call them privately and invite them for a quick coffee chat or a casual check-in. Keep the tone light and non-intrusive.
“Your goal is not to pry more information or appear intrusive. You can start with a random conversation about non-office topics, such as family, career, goals, and so on. Then, gradually ask about their financial wellness. Provide a comfortable environment till they open up. If they don’t immediately, don’t appear pushy. They’ll come around when they feel comfortable enough”, Sean Shapiro, Managing Partner at Axia Advisors, advises.
2. Provide Resources and Partnerships
During your conversation, be as helpful as possible, rather than just offering sympathy. Try to provide as much personalized help as possible—you can ask what is exactly wrong and get back to them later with tailored solutions to achieve this.
For instance, employees residing in high-cost regions, such as California, may struggle with housing or transportation expenses. In that case, you could connect them with housing support services, explore flexible work options like working from home to ease commuting costs, or consider California debt relief programs if they’re struggling with debt.
Help them gather relevant resources with steps they can implement right away.
3. Revamp Employee Benefits
Take an assessment of what’s placing a financial strain on most of your employees and tailor your employee benefits to that. For instance, if the majority of your employees spend a bulk of their salary on health-related issues, you can revamp your employee benefits to include a health package like insurance coverage and mental health support.
You can also introduce financial wellness programs, such as paid gym tickets or in-office gym space, stock options, loyalty bonuses, or even paid time off, access to childcare support, and other benefits that can be reasonably afforded.
Of course, be careful not to overstretch your capital.
4. Recognize and Support Financial Progress
Go a step further by creating an environment that celebrates financial growth. Consider offering rewards for completing financial literacy programs or incorporating tools like budgeting apps and savings trackers into the company’s wellness package.
Create pep sessions where your employees share their financial ideas and explore how the company can support them in achieving their goals.
Wrapping up
Your employees are the heart of your organization, and their financial health directly impacts their performance and long-term loyalty. While you can’t solve every money issue they face, you can create a workplace that notices and responds with empathy and action.
Start by paying attention to signals such as social withdrawal, increased absenteeism, sudden requests for payday advances or loans, irritability, and declining productivity.
Step in by striking up a conversation first and find out what’s wrong. Help provide resources and tailored programs that are helpful. You should also revamp your organization’s employee benefits based on the majority’s challenges and actively recognize each person’s contribution.
Guest writer
