Part three: Financial health plays a key role in employee engagement

Stress in the workplace is certainly nothing new. But what has evolved are conversations around the essential role employers can play to help relieve it. In fact, 90 percent of employees believe their workplaces have a responsibility to ensure they’re mentally and emotionally well.

A huge part of mental and emotional wellbeing is the feeling of economic stability and security. Financial health can impact everything, from an individual’s self-esteem to their ability to get a good night’s sleep, and is therefore an important factor in other aspects of wellbeing such as mental and physical health.

Here’s a closer look at financial health, and how it intersects with other elements of health to impact employee engagement, productivity and performance.

What does financial health really mean?

Financial health refers to an individual’s financial stability and economic security. It includes considerations such as:

• Is their income sufficient to cover their needs?
• Are they able to navigate financial challenges?
• Can they progress toward their financial goals?

According to a survey of 2,000 Americans about the impact of their finances on their mental health, nearly nine in 10 (88 percent) reported feeling financial stress, with 65 percent stating that their finances are the most stressful aspect of their life.

The connection between financial and mental health

When financial health is lacking, it can lead to mental health disorders such as depression and anxiety. The TELUS Mental Health Index demonstrates that employees with the lowest mental health scores are also those who have the most trouble managing finances.

The opposite holds true, too. Those who reported managing their financial responsibilities successfully weren’t just better off in terms of mental wellbeing — they actually enjoyed the highest mental health score of the entire cohort. They lead the national average by more than five points, and score more than 30 points higher than those struggling to manage their financial responsibilities.

The connection between financial and physical health

Forty eight percent of U.S. adults reported having problems sleeping due to debt-related stress, according to a Forbes Advisor survey. This is troublesome, as the Columbia University Department of Psychiatry found negative emotional reactions to stress are amplified by a lack of adequate sleep.

Additionally, because financial stress is such an acute form of stress for so many, it can also contribute to the development of chronic conditions such as heart disease and high blood pressure.

How financial health can affect employee engagement

A lack of financial health isn’t just a burden; it’s a distraction. PwC found that 56 percent of employees who are financially stressed spend more than three hours a week dealing with or contemplating their personal finances while on the job, and 44 percent note their financial stress has a negative impact on their work. Another survey estimates that this costs businesses $183 billion in lost revenue every year, and that employees lose more than seven hours of productivity each week due to financial strain.

Reducing this stress can directly lead to performance improvements. PwC’s research has shown that employees who have higher levels of financial security are also more engaged, with over three quarters agreeing that they enjoy their work — and financial wellness tools can help reduce employee turnover, while also attracting higher quality employees.

Facilitating improved financial health for the workforce

Analyzing six decades of data, one study noted that better pay consistently predicted higher rates of employee health and wellbeing. It also led to better outcomes for organizational performance over time due to decreased absenteeism and turnover.

PNC Bank discovered that 96 percent of employers recognize that financial wellness tools and benefits can increase rates of retention and satisfaction. The workforce agrees; 76 percent of employees look for employers that provide solutions that will help them improve their financial health, and 80 percent say such benefits would lead to them staying with their employers for a longer duration.

Financial assistance through an employee assistance program (EAP) can be an effective way to help employees realize their goals, and is another way to help enhance their sense of personal financial health without simply resorting to giving raises.

For employees, the feeling of being in control of their financial possibilities increases their satisfaction and participation levels. In one survey, employees who felt financially healthy rated their happiness levels at 84 percent compared to their peers, whose happiness levels middled at 55 percent. They also report higher levels of engagement at 78 percent, compared to 53 percent among those with a less positive financial outlook.

Take a holistic approach to employee health with TELUS Health

TELUS Health offers a suite of services that can help support the mental, physical and financial health of employees. TELUS Health Wellbeing, for example, helps to empower everyone to reach their wellness goals and maintain healthy habits, while retirement and benefits administration solutions can help support employees in preserving and growing long-term wealth.

TELUS Health EAP includes access to financial assistance support, while TELUS Health Learning supports wellbeing and skill development in a variety of formats to help improve employee performance, productivity and overall organizational effectiveness.

Learn more about the other factors and facets of holistic health, and how TELUS Health supports both employers and employees.