Employee financial health is in crisis—and it’s a business problem that costs companies more than they may realize. A WTW study revealed that poor employee financial health costs large employers $3,000 to $4,000 per employee each year.
While physical and mental wellbeing programs have grown in popularity, poor financial health remains the most overlooked dimension of employee support. With 70% of employees not financially healthy, addressing financial illness is the largest unaddressed opportunity for employers with large frontline workforces. Here’s a closer look at the business impact of overlooking financial illness.
1. Financial wellbeing is employees’ lowest-rated dimension of health
The 2024 Buck/Gallagher Wellbeing and Voluntary Benefits Survey shows that 92% of employees are asking for more financial support, making it their top request. Despite rising wages, inflation, healthcare costs, and high interest rates have left 55% of employees financially stagnant or worse off than a year ago.
2. Employees perceive a lack of financial support from employers
While 72% of employers said they planned to address financial wellbeing this year, only 50% of employees felt they’ve received increased support, suggesting many current initiatives are missing the mark. With just 30% of employees financially healthy, benefits leaders should recognize that traditional financial wellness programs reach only a small segment of their workforce. The remaining 70% of employees have diverse financial needs:
- Lower-income employees prioritize support for day-to-day expenses
- Gen Z values help with student loans, emergency savings, improving credit scores, and budgeting
- Millennials want employers to help them access banking services as part of their financial support
Maintaining the status quo risks wasting budget dollars on benefits that fail to make an impact on most employees’ financial stress or health.
3. Unaddressed financial needs drive turnover
An NFP study revealed that 60% of employees are increasingly distracted by the affordability of basic expenses, and 50% feel the same about debt. Buck’s survey found that a third of employees couldn’t cover a $500 emergency, and 24% are unsure about how to manage money.
With 63% of employees open to switching jobs for better benefits, employers who aim to reduce turnover must ensure their benefits genuinely address employees’ financial needs—or risk losing them to organizations offering the financial support they seek.
4. Financial illness impacts health—and healthcare costs
Financial illness contributes to health conditions that increase employer healthcare costs by an additional $1,100 per employee annually. More than half (56%) of employees report that financial stress delays or prevents them from seeking healthcare, and 31% say they need help covering medical expenses. Financial illness drives chronic conditions like cardiovascular disease and hypertension, along with mental health challenges such as anxiety, depression, and insomnia. Financial stress is also a leading cause of absenteeism, according to the American Psychological Association.
The biggest opportunity you’re not addressing
Employers who recognize that financially strained employees have distinct financial needs—including struggles with basic expenses, money emergencies, debt, and poor credit—can significantly reduce costs and improve employee wellbeing. However, meaningful support requires an approach beyond financial wellness.
Amazon and other Fortune 500 employers that have embraced Brightside Financial Care to treat financial illness are already seeing substantial ROI, including:
- 41% reduction in turnover
- 50% of employees contributing to emergency savings from each paycheck
- 3% increase in hours worked per employee
- 34% reduction in employees with subprime credit scores
- $1,200 back into employees’ pockets when they work with Brightside
To learn more about Brightside Financial Care or schedule a demo, click here.
