Personal finances impact overall work performance… But how?
Making sure that both performance and productivity maintain a high level of functioning ultimately comes down to your employees and their individual satisfaction and motivation while at work or on the job.
There are numerous strategies and proven ways, including company-wide benefits, that are put in place to help employees feel taken care of, boost morale, and keep their motivation at an all-time high. Whether or not it’s something you’ve considered, financial planning, for your employees, is one of those proven ways that can help ensure employees are satisfied and business is thriving.
In fact, the need for financial planning in the workplace is quite alarming. We’ve done quite a bit of research in this area, and the stats speak for themselves. Here’s what we’ve found:
- Financially stressed employees miss 3.5 more workdays each year
- 58% of employees experience financial stress that impacts work
- 90% want employer-provided financial wellness benefits
- More than 50% of employees are living paycheck to paycheck
- 63% of employees are unable to handle an unexpected expense of $500
- 75% of respondents admitted to being more likely to consider a job that offered free financial advice as part of a benefits package.
Like I said, pretty alarming. It’s clear from the above that financial planning offered as a benefit to employees has a considerable amount of upside, but how exactly does that play out in the workplace? Well, below are eight ways financial planning directly relates to and improves both performance and productivity.
1. Employees will enjoy going to work
When your employees are struggling financially, they’ll feel as if it’s the only thing that matters in life. And rightfully so. For most of us, how we make our money and how we manage it has a significant impact on just about everything else we do, whether it’s at work or at home. Ultimately, it means that it consumes most of our headspace, and makes everything else that we do less enjoyable.
Of course, this impacts business productivity because your employees’ minds will be elsewhere, especially if they are faced with other job-related challenges throughout the day. What it comes down to is their focus being directed at personal finance matters, not their work.
By looking at how you, as an employer, can equip your employees with additional financial wellness and resources to help them with their financial planning will directly end up benefiting not only their financial success, but yours by virtue of their work performance.
As an employer, you want your employees to come in with a smile on their face and to enjoy going to work every day.
2. Financial planning decreases stress
A lack of financial planning often leads to an unhealthy amount of financial stress. Stress is something that every single one of us experiences, at different times and in different types of situations. However, money-related stress is a major form of stress that often has a significant impact and influence on other areas of your life including your relationships, your social status, and notably in this context… your work.
To say the least, money-related stress can be the most debilitating type. There are many reasons for financial stress but what it comes down to is a lack of sufficient planning around how you manage your money. When you properly plan your finances, you’ll better understand how to protect your income, how to make more, how to save more, how to spend less, how to tackle your debt, and how to calculate and plan for retirement.
You want your employees to feel like they’re in control and that they have a handle on any situation, work-based or personal. As far as their own personal finances go, having a financial plan they can stick to is one of the most certain ways to alleviate and reduce their financial stress.
3. Financial planning builds loyalty within the company
Employee retention is important for your company for several reasons including the amount of time, effort, and money you’re able to save as an organization. Happy and loyal employees will eliminate the need for trying to recruit and fill for the same roles multiple times over again.
Building loyalty isn’t always the easiest to achieve, but ultimately it comes down to providing the right resources, tools, and benefits for your employees to ensure that all aspects of their work life provide them with comfort and enjoyment. The companies that go above and beyond by designing benefits and rewards packages to ensure their employees are satisfied both while at work and at home will win in the long run.
As you might have already guessed, one of those ways is by providing financial planning and wellness benefits. If your employees struggle with managing their own personal finances and are in need of assistance, which there’s a good chance this is true, then you have an opportunity to show them you care to build that trust and that respect. Providing your employees with the right tools and resources they need for their finances will only reinforce a positive attitude towards how they feel about work and their loyalty within the company.
4. Financial planning helps with general focus
In order to reach peak performance and productivity, your employees need to be focused on the tasks they have to complete for the day, week, month, and so on. One of the absolute best ways to increase focus is to decrease the amount of distractions.
Distractions surface all over the place and come in many different forms. As an employer, it’s important that you are doing everything you can to eliminate the amount of (negative) distractions in the workplace. While also at the same time doing everything you can through incentives and benefits offering to make sure that distractions don’t carry over and impact employees’ lives outside of work.
As you may have guessed, personal finances can be and often are a major distraction while both at work and at home. A distraction that leads to stress if it continues to be one.
5. Empowers them to do anything they set their minds to
As employers, you can offer your employees all of the workplace-related resources and opportunities in the world that they need to succeed. However, if there are major challenges behind the scenes, so to speak, then you might not be doing the justice you think. And worse, the return on your investment won’t properly show.
On the flip side, if you’re able to empower your employees in their personal lives, notably their financial lives beyond a paycheck, then you’ve unlocked a true superpower. There’s a good chance that with this empowerment, your employees will put it to good use for just about everything else they do on behalf of the business.
One of the major benefits of financial planning is that it helps to increase motivation for just about everything in our lives, again showing the impact finances have on us.
6. Employees will feel more like themselves
Being worried about anything in life, especially finances, creates distractions. And not the good kind either. Being negatively distracted takes away from both our regular state of mind and being, leaving us feeling tired, stressed, unattentive, and the opposite of what it means to be our normal selves.
As an employer, it’s a no-brainer that you want your employees coming into work everyday feeling like they can take on the day with their head held high and full of energy. A distracted mind, whether it be from personal financial worries or other personal-related issues, removes the certainty of that taking place.
Financial planning results in control of our financial lives, which results in a large amount of stress and worries being eliminated about our financial future, ultimately meaning…
7. Helps to leave personal matters at the door
You pay your employees by the hour or via a salaried arrangement. Either way, the relationship between you and your employees is essentially a commitment to one another, and that often comes with the expectation that personal matters should be left at home.
However, that’s hardly ever the case. So much of our personal lives impact our work lives, and vice versa. Making it extremely difficult to ‘leave’ anything at the door.
When personal problems creep into the working environment, it impacts the overall atmosphere of the workplace as well as how productive it is. With financial planning, you’re allowing your employees to focus more on the work and tasks at hand than spending hours a week on their own personal finances during working hours. The more they devote to the company’s needs, the better your company’s performance is going to be overall.
8. Benefits both their physical and mental wellbeing
There’s a good chance you’re familiar with the saying health is wealth. Well, that certainly also rings true for your employees and your company’s balance sheet. In other words, your employees’ health is your company’s wealth.
Being both physically and mentally healthy is critical and arguably one of the most important factors that influences everything else we’ve talked about up until now.
By focusing on your employees’ mental and physical well-being, you’re going to see a dramatic improvement to both the performance and productivity within the workplace. It’s times like these where mental health can be challenged, and if as a business, you’re able to help your employees, then it should be prioritized at all costs.
Better access to financial planning and wellness resources positively correlates with how and when your employees are looking after themselves both physically and mentally. The state of their personal finances can be draining on their minds, which will impact their physical state. Being stressed, tired, and emotionally drained often results in loss of sleep, loss of appetite, and considerably less energy throughout in addition to several other side effects. All of which significantly impact the ability to work at peak performance.
Providing employees with the financial planning benefits they need
The above showcases eight out of several ways of how financial planning can lead to increased work performance and productivity. Ultimately, what it boils down to is providing additional resources and tools as part of your benefits package that show your employees you care, you understand their needs, and that their success outside of the workplace matters.
When you provide such benefits, your employees will reciprocate by staying positive, motivated, and eager to show up ready to conquer their day. After all, your employees are your biggest asset, by investing in them, you’re investing in the success of your company.