Financial stress is an ongoing struggle that affects the wellbeing of an employee. Research concludes that financial stressors, including debt, household expenses, education and other contributing payments, impact over 6.7 million Australians saving for long-term expenses.
In a webinar hosted by Workplace Options, Director of Business Solutions, James Callender, explores the impact and overall repercussions of financial stress in the workplace. Guest speakers, James McFarland, Principal Director of Insurance and Benefits Advisory; Sadie Restorick, Cofounder and Chief Operating Officer of Wellity Global; and Rony Morgan, EAP Clinician at Workplace Options Australia, share their input on how financial strain leaves employees with significant health issues.
Identifying Financial Stress
Financial stress can be characterised as the stress an individual faces in response to their personal financial situation. This might involve student loans, living expenses, debt, mortgage commitments and additional contributing factors.
‘Imagine yourself being stuck in a deep, dark well. It is cold, damp and the walls are slippery. The light at the top of the well represents financial stability and peace of mind. It can feel impossibly far away. Every so often you manage to climb and pay off a little debt and save a little bit of money, but it is easy to fall or slip back down to the bottom of the well. These are setbacks: unexpected expenses or lost income . . . Eventually you will find yourself in a cycle that keeps pulling you back in. The more you are stressed about money the harder it is to make better financial decisions’, says Rony Morgan.
During the webinar, James Callender reveals that 38 per cent of the audience consider debt and building savings as the biggest contribution to financial stress. However, household expenses account for 21 per cent of the respondents, whilst education accounts for only 4 per cent.
Financial stress can result in numerous physical and mental health complications that impact an employee’s ability to perform adequately and adhere to daily tasks. Rony Morgan outlines the significant implications that financial stress has on an employee’s wellbeing. Some of which include:
- Anxiety
- Depression
- Fear
- Shame
- Low self-esteem and self-worth
- Neglecting self-care
- Social isolation
- Unhealthy coping mechanisms- smoking and excessive alcohol consumption
- Physical health conditions- headache, insomnia, decreased immune function and/or fatigue/exhaustion
Due to the health complications of financial stress, it is important to implement Employee Assistance Programmes (EAP) to give employees access to resources for support. Sadie Restorick said, ‘Making sure education is tailored to the needs of the people and not just guessing what they might need. Thinking a bit deeper than the surface level of financial wellbeing, but also, all the things that might affect financial wellbeing or can cause financial stress on an individual‘.
In response to Sadie’s comment, James McFarland adds, ‘It is all about the individual and how they perceive their financial position, how happy they are with their financial decision… Knowledge is power, if you understand how things work, how to improve and have the encouragement in the ability to do so, it improves someone’s financial health’. Overall, it is important to look closer at each employee’s financial situation differently and provide each person with modified training of support.
Every individual is different in terms of how financial stress may affect them. James McFarland states, ‘Age plays a big role. If I talk to someone in their 30s, [their financial stressors may stem from] the cost of rent or the cost of living … if you look at the 35 to 45 to 55 brackets, that is when we have our big mortgages, children, school fees’.
Financial stress causes significant physical, mental and emotional health concerns to employees not only in Australia, but worldwide. For more information on Workplace Options wellbeing programmes, services and trainings for your organisation, contact us to learn more.
