Research has demonstrated that employees who are experiencing financial stress have lower levels of organizational commitment and job satisfaction and lower pay satisfaction (Kim and Garman, 2003). For example, in a medium-sized (329 employees), high-technology Israeli company whose annual before-tax income was approximately $17 million (in U.S. dollars), financial stress reduced business performance. The productivity loss of four types of withdrawal was 16.5% of annual before-tax income or $2.8 million. The sources of cost were absenteeism (49%), turnover (27%), withdrawing effort (20%), and lateness (4%).
Experts estimate that between 20% and 40% of an employer’s workforce is experiencing financial stress at any point in time (Garman, Leech, & Grable, 1996). They estimate that these financially stressed employees spend slightly more than 1½ days per 50-week work year on personal business.
Experts estimate that employers who plan and implement financial wellness interventions realize benefits and savings in the form of reduced FICA expenses due to greater participation in flexible spending accounts (FSA), increases in worker productivity, and reductions in payroll and benefits costs because more retirement-eligible employees who wish to retire are able to do so.