May is Mental Health Awareness month and I want to take some time to discuss the intersection between mental health and financial health because it’s a crucial aspect of employee wellbeing. This relationship between mental and financial health plays a significant role in the lives of your employees, influencing their productivity and overall contentment. As employers, acknowledging this intersection and its impact can guide the development of supportive strategies for staff.
According to the CDC, more than 20% of people in the US are navigating their daily lives while managing a mental illness. This statistic also translates to the workplace, indicating that you likely have employees striving to excel professionally while wrestling with mental health challenges. The stigma around mental health has been diminishing, but there is still a pressing need to delve into its impact and seek ways for employers to support their staff better.
Let’s consider the following statistics from the Money and Mental Health Policy Institute to understand this connection better:
- 46% of people in debt also have a diagnosed mental health issue
- A staggering 86% of people with mental health issues and debt feel their debt exacerbates their mental health problems.
- People with depression and debt are 4.2 times more likely to still have debt after 18 months than those without debt.
Although global events like the COVID-19 pandemic and high inflation rates have exacerbated financial stress, it isn’t limited to hard economic times. In fact, as the stats show, those with mental health issues are already at increased risk of experiencing money problems which only leads to more stress creating a cycle hard to break.
So financial difficulties come hand-in-hand with stress and anxiety, leading to decreased productivity and engagement at work. It's essential to recognize that employees' struggles outside of work can bleed into their professional lives, impacting your business. PwC's 2023 employee financial wellness survey found that 57% of respondents ranked finances as their leading stressor, with 55% admitting that financial stress significantly affected their mental health over the past year.
Financial stress can lead to detrimental outcomes like lower quality work, strained office relationships, and increased staff turnover. It also leaves tasks unfinished, higher healthcare costs, more on-the-job accidents, increased absenteeism and presenteeism, and decreased participation in benefits like 401(k) programs.
One way you can help your employees deal with financial stress is by providing them with a financial wellness benefit. These programs are designed to address the source of financial stress and provide tools, education, coaching, etc. to your employees to help them manage and control their finances.
By equipping employees with the knowledge and tools they need to manage their finances effectively, financial wellness benefits can help reduce financial stress. When employees feel secure and in control of their financial situation, they are likely to experience lower levels of stress, which can have positive effects on their overall wellbeing and productivity at work. Financial wellness benefits not only support employees' financial health but also contribute to their mental and emotional health by alleviating financial stress.
Why is financial wellness important?
Recognizing the importance of financial wellness in the workplace is paramount in acknowledging finances' role in our lives. Financial wellbeing is not simply about income; it encompasses security, the ability to meet financial needs, and the freedom to make choices that bring joy. It requires a balance of income, expenses, savings, and debt, influencing both our mental and physical health.
Financial wellness activities, such as budgeting, saving, and investing, have significantly enhanced one's financial health. Activities like setting aside a part of one's income for savings or investing in a retirement fund are effective strategies that help reduce immediate financial stress and prepare individuals for future financial goals.
Many companies recognize the value of financial wellness for employees and create dedicated financial wellness benefits. These programs offer resources like workshops, online courses, or personal one-on-one guidance to enhance employees' financial wellbeing. There are many benefits of financial wellness which lead to less stressed and more productive employees, fostering a positive work environment, and improving business performance.
Financial wellness programs for employees are integral to overall wellbeing and mental health. It provides numerous benefits to individuals and organizations that prioritize it. Promoting financial wellness in the workplace leads to a healthier, balanced, and more productive society. The link between financial wellness and mental health is strong, and financial stress can lead to mental health challenges. By providing employees with the tools they need to manage their finances effectively, you can help reduce financial stress, improving overall mental health. Financial wellness is more than just fiscal responsibility—it's a critical component of holistic wellbeing.