Why financial control is the answer to improving employee wellness

Holiday spending often leaves people feeling a little financially “blue” in January and February, and this year may be especially troublesome given inflation and stock market woes. In fact, North American workers are experiencing the highest level of financial stress since the financial crisis of 2008.

That’s bad news for employers.

New research finds that 82% of employed North Americans spend time during work thinking about personal finances, and nearly 1 in 4 (23%) spend one hour or more a day. That amounts to a whopping $664 billion productivity loss for employers based on average hourly wages.

Clearly, financial stress is no longer just an individual’s problem, but also a problem for businesses, too.

Financial control impacts holistic wellbeing

Research is starting to expose just how much a feeling of financial control matters to one’s overall wellbeing.

According to a study by Social Indicators Research, financial control is equally or even more important than financial fragility in determining wellbeing. The study showed that financial control impacted all aspects of people’s daily lives, including emotional, physical, and social wellbeing.

Furthermore, having financial control resulted in positive associations such as feeling healthy and full of energy, while limiting the subsequent number of days with poor physical and mental health.

Employers already know how valuable it is to have an employee who is energetic, positive, and emotionally and mentally healthy. To promote wellbeing, many have already begun offering new perks like therapy sessions or access to a gym, but financial wellbeing is an important part of the mix that employers should be prioritizing.

Employers can help

One way to get there is by embracing financial wellness benefits.

With economic headwinds hitting many industries, employers are struggling to raise wages to keep up with inflation. On-demand pay, or earned wage access, enables employees to access wages already earned before the traditional two-week or monthly pay cycle. Whether an employee wants to invest their earned wages to take advantage of higher-yielding savings accounts, or pay for an unexpected auto repair, being able to access pay on-demand allows workers to better control their finances and potentially avoid high-interest credit card or payday loan costs.

Most importantly, on-demand pay gives workers control over their earned wages, allowing them to claim their paychecks on a day when they most need it.

Financial knowledge also contributes to financial control. Many financial wellness apps for budgeting, banking, and investing are easy to access on mobile phones. Through on-demand pay, employees can easily add same-day access to earned wages to their arsenal of mobile-friendly financial wellness tools.

Encouraging more employee loyalty

Losing top talent is never a good thing because of the challenge and costs to recruit, hire, and train that talent again. In today’s economic times when budgets are constrained, it’s even more important to retain workers and motivate them to stay productive.

That’s where loyalty comes in. More than 8 in 10 North American workers wished their employer offered non-health benefits, such as on-demand pay and flexible work arrangements and – if offered – 82% say they would feel more loyal to their employers, research shows.

Related: Financial wellness is a necessity for employers to offer

Companies that work to meet the needs of their employees, whether economic conditions are good or challenging, will always come out ahead. Employers should offer long-term solutions that stick, not just a quick fix for mitigating the post-holiday spending blues. Benefits that boost a sense of financial control, thus boosting wellness, among workforces will go a long way toward ensuring a successful year ahead.

 Seth Ross, General Manager, Dayforce Wallet & Consumer Services, Ceridian