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The Secret to a More Productive Workforce

There are a lot of things competing for your employees’ attention like deadlines, meetings, and emails. But there are three other sneaky causes of less-than-optimal workplace productivity that are likely to surprise you. What’s at the root of those distractions? Personal debt. 

Over half of your employees are wasting 9+ hours each week while on the job.

A 2022 survey found that 3 out of 4 U.S. workers are facing serious financial stress.[1] Over half of these workers spend 25% of their time dealing with their personal finances while at work—approximately 9.2 hours a week (or 478 hours a year).[1] That’s a significant increase from 2015 when a similar study by the Consumer Financial Protection Bureau (CFPB) found that employees were spending 3 hours a week doing the same.[2]

While these numbers may be quite a shock to business owners, Beatriz Hartman, Business Development Manager for Consolidated Credit, isn’t surprised. 

“Financial stress is crippling because it’s almost impossible to think about anything else if you’re worried about keeping the lights on or keeping a roof over your family’s head. Financial challenges usually come with an overwhelming sense of doom that can be tough to ignore, so even dedicated employees will be distracted by a challenge with money at home.”

And it’s not just hourly wage employees who are feeling the pressure of financial challenges. According to a survey from SunTrust, roughly one-third of households earning $75,000 or more annually report that they are living paycheck to paycheck with almost no money in savings to cover an emergency. 

“This is a problem that can affect everyone from administrative and support staff to middle management and even executives,” Hartman affirms.

Distracted employees are costing your business

When your employees’ attention wanders, workplace productivity dips right along with it. The result of this disengagement can have a major impact on a business’s bottom line. According to the latest Gallup poll, distracted employees can cost your company up to 18% of their annual salary.[3]

Results

According to SHRM (Society of Human Resource Managers) 61% of employees experience financial stress. In your company that would be…

0 employees

It is also said that out of this 61%, 1 out of 3 employees will spend company time trying to resolve their financial issues. On average, employees will spend 12 hours per month doing that. In your company, that would be…

0 hours

Lack of productivity due to your employees financial issues are costing the company roughly…

$0 per month

“The loss in productivity can be widespread with potential to significantly decrease profit margins. And it’s not a question of whether you’re employees are distracted by finances or not. These days it’s a question of just how many members of your staff are facing this kind of situation.”

What are your employees worried about? The 3 financial reasons they aren’t paying attention at work

There are three key financial concerns causing 75% of U.S. workers to feel so overwhelmed they have trouble focusing at work: bills, personal debt, and paying for unexpected emergencies.

Reason No. 1: Juggling Bills

Nearly half of all Americans are struggling to make ends meet[2] and more households than ever have fallen behind on their utility bills. Approximately 20 million owe double what they used to before the pandemic.[4]  

“If a worker does not have enough income to cover all of their bills and basic living expenses,” Hartman explains,“ the constant balancing act that it takes to stay ahead can be exhausting. Juggling bills, figuring what needs to be paid now and what can wait, using one credit card to pay another—all of this can consume a financially stressed worker and make it tough for them to focus,” says Hartman

“Employees are on the phone trying to work out payment plans that keep them out of collections or constantly on a mobile device checking account balances to make sure they have sufficient funds to cover the next bill that’s due. It’s endless,”

Reason No. 2: Spiraling in a Cycle of Debt

“Credit cards are often a tool people use to stay afloat when their budget is stretched thin, but at a certain point taking on debt becomes the problem instead of the solution,” says Hartman. “Once credit cards are maxed out some people turn to payday loans, which may provide short-term relief. But often in the end they only make a bad situation worse.”

This cycle of debt is well known to the certified counselors at Consolidated Credit. Clients like Robert and Rebecca turned to payday loans during times of financial hardship, only to find themselves even further in debt with unmanageable interest rates. Debt problems of a few thousand dollars can quickly spiral into $10,000 or higher.

“High balances to pay off combined with high-interest rates create an untenable situation,” explains Gary Herman, President of Consolidated Credit. “Even if the borrower pulls it together to make payments on time every month, balances may never decrease because those payments are barely enough to cover interest charges. So they pay and pay, but never make progress. It’s frustrating and creates a situation where it can be tough to think of anything else.”

Reason No. 3: Emergency Expenses

A general rule of thumb is to have enough savings to cover at least three months of living expenses. The majority of Americans, however, have less than $1,000 saved up and a quarter of them don’t have any savings to speak of at all.[5]

“Even high-income earners report that they’re living paycheck to paycheck,” Herman continues. “This leaves millions of households vulnerable to financial challenges that arise out of an emergency. Whether it’s an accident that leaves a family with ER bills to pay or a major home repair, one emergency can send your finances into a tailspin if there is no money in savings to cover it.”

What you can do to help distracted employees

When financial distractions for your employees impact your bottom line, financial wellness becomes a corporate problem. Financial well-being is one of the five elements that make up overall well-being. Unsurprisingly, lower well-being scores are associated with increased risk of burnout, daily stress, likelihood to look for a new job, and decreased workplace productivity.[6] 

Is there anything that employers can do to help? Would employees even want assistance from their workplace? The research says yes: 84% of employees think their employers should take responsibility for their financial well-being. [1] The big question then, is how?

The solution isn’t necessarily a bigger salary—which isn’t always feasible (or realistic). A more cost-effective way of reducing employee financial stress would be to teach them how to make smarter financial decisions to manage the money they already have.

Financially-healthy employees are productive employees

Given that productivity issues caused by financial challenges at home have become so endemic, more and more companies are looking to provide solutions as part of their employee benefits packages. Alongside company health and dental plans and 401(k)’s, employers are now offering financial wellness resources like KOFE (Knowledge of Financial Education), an online financial literacy and education platform that offers self-paced learning, interactive courses; customizable webinars and seminars; and one-on-one coaching to cover all the essential personal finance topics.

“By and large, personal finance is learned in the school of hard knocks unless someone provides a means for individuals to learn how to manage their money, debt and credit effectively. Implementing corporate financial wellness programs is a sign that companies are stepping up to fill this need for their employees,” Hartman says. “And filling that need not only increases productivity but fosters loyalty as well.

All of the materials are customizable, allowing your business to offer a seamless experience to your team. For more information on KOFE, Consolidated Credit’s Corporate Financial Wellness platform, contact us or call 1-800-901-8304. Our business development team can help you customize KOFE to fit the needs of your employees and improve workplace productivity.

For more information on KOFE, Consolidated Credit’s Corporate Financial Wellness platform, call 1-800-901-8304. Our business development team can help you customize KOFE to fit the needs of your employees so you can start seeing improved workplace productivity before the end of the year.