How financial stress is hurting your business: And how to address it

Financial stress isn’t something that employees can “leave at the door” when they show up at work. It’s in the background of every project, decision, and interaction. While many HR leaders are doubling down on mental health strategies, there’s a blind spot that continues to undermine those efforts: employees’ financial stress.

The reality is that mental health isn’t confined to just what happens at work. If someone is losing sleep over debt, worried about paying for housing costs, or unable to cover an unexpected expense, those anxieties bleed into their performance, relationships, and resilience. Addressing this requires more than higher salaries or one-off perks. It demands a shift in how organizations define and support employee wellbeing. 

Financial stress is a mental health issue

Money-related stress is more than an inconvenience. It’s a chronic, corrosive force that erodes mental wellbeing over time. It isn’t just about not having enough money. It’s about the uncertainty, the sense of instability, and the emotional toll of feeling like you’re one unexpected expense away from financial collapse. Financial concerns are one of the most commonly cited sources of anxiety. According to PwC’s Employee Financial Wellness Survey, 57% of employees reported that money is the leading cause of stress in their lives, outranking health, relationships, and work. 

These pressures have real mental health consequences. A study by SoFi at Work revealed that nearly 9 out of 10 employees are stressed about finances, with 47% stating it negatively impacts their mental health. The American Psychological Association has also drawn a clear line between financial stress and psychological distress. In its annual Stress in America survey, money consistently ranks as a top source of stress, with direct correlations to anxiety, depression, sleep disorders, and burnout. 

Chronic financial stress doesn’t just affect how someone feels; it impacts how they function. Cognitive resources are finite, and when a significant portion is consumed by financial worry, there’s less capacity left for focus, creativity, decision-making, and interpersonal connection at work. It’s not uncommon for employees under stress to become more irritable, distracted, or withdrawn. Symptoms that are often misinterpreted as performance issues rather than red flags of deeper distress.

If employers want to meaningfully address mental health in the workplace, they must confront financial stress as a root cause, not just a side effect. 

The hidden costs of employee financial stress

Financial stress has tangible repercussions on organizational performance. When employees are preoccupied with financial concerns, their productivity, engagement, and overall job performance can suffer, leading to significant costs for businesses.​

According to the 2024 Wellness Barometer Survey by BrightPlan, employees report losing an average of 7.3 hours of productivity each week due to financial stress, costing employers approximately $183 billion annually.​ 

Additionally, financial stress contributes to increased absenteeism. Researchers at Boston College found that employees facing financial difficulties are more likely to miss work, with absenteeism rates nearly doubling compared to their financially stable counterparts. This not only disrupts workflow but also places additional strain on other team members, potentially leading to decreased morale and further productivity losses.​

The ripple effects of employee financial stress permeate various facets of organizational operations, from productivity and attendance to retention and decision-making. Addressing this issue isn't just a matter of employee wellbeing; it's a strategic imperative for businesses aiming to maintain a competitive edge and foster a resilient workforce. 

Why raises aren’t always the answer

While salary increases can help, they don't address the root causes of financial stress. Financial wellbeing encompasses more than income; it involves financial literacy, planning, and resilience.

It's important to note that financial stress is not limited to lower-income employees. In fact, many Americans making over $100,000 per year are currently living paycheck to paycheck. Many high earners experience financial strain due to various factors such as high living costs, student loan debt, lifestyle creep, and unexpected expenses. This underscores the importance of financial wellbeing programs that focus on education and address the unique needs of each employee, regardless of income level. 

Integrating financial wellbeing in to wellbeing initiatives

Many employee wellbeing programs fail to make the connection between financial security and wellbeing. Holistic wellbeing is about recognizing the full context of an employee's life. That includes work stress, but also personal stressors like caregiving responsibilities, housing insecurity, and financial strain. When organizations build strategies that acknowledge this full picture, they see better outcomes across engagement, productivity, and retention.

Integrating financial wellbeing into an organizational strategy means more than offering resources, it means removing barriers. Navigate proudly partners with Your Money Line as a financial wellness benefit to provide employees with direct access to credentialed financial experts who can answer questions in real time, whether about budgeting, credit, or dealing with a life change. This kind of personalized support builds financial literacy and reduces the paralysis many people feel when managing money, especially in moments of crisis or uncertainty. Additionally, the Navigate platform integrates resources like financial dashboards, calculators, on-demand courses, and customized learning paths for each employee to build confidence, make informed decisions, and take measurable steps toward long-term financial stability. 

Final thoughts on finances

Employees experience stress as a whole, not in neatly separated categories. Financial strain doesn’t wait until after hours. It can affect focus, performance, and even decisions about whether to stay in a role. When HR leaders recognize financial wellbeing as part of the broader mental health picture, they’re better positioned to support individuals and build a stronger, more resilient workforce.

Closing the gap between how we define wellbeing and how employees actually experience it is a critical step forward. The most effective organizations understand that supporting people at work also means supporting their lives beyond it.

Ready to see how Navigate can help your employees become more financially secure? Schedule a personalized demo of our platform today!