Financial stress costs businesses $31b annually

A new report highlights the urgent need for workplace financial wellness programs, while cost of living is driving a financial wellbeing crisis.

Based on insights from over 25 executive leaders representing more than 350,000 employees, a recent report by Evolution Media Group, The Growing Need for Financial Wellbeing in the Workplace, reveals the overwhelming financial stress faced by Australian employees.

Over half of the employees reported significant financial strain that impacts their mental health, productivity, and overall job satisfaction. Meanwhile, financial stress is costing Australian businesses around $31 billion annually in lost productivity, absenteeism, and turnover, the report reveals.

As the cost-of-living crisis intensifies, employees are increasingly looking to their workplaces for support. “While many organisations are beginning to acknowledge the connection between financial health and overall wellbeing, only 25 per cent currently provide employees with direct access to financial advisers, estate planners, or mortgage brokers,” noted Vannesa Stoykov, Evolution Media Group’s founder and CEO.

Key findings of the report indicate the link between financial stress and mental health and its link to workplace productivity loss. “Financial stress is now a major cause of anxiety and depression among employees, with 65 per cent of workers stating that that financial worries impact their ability to focus at work,” she said.

Financially stressed employees spend on average 13 hours each month dealing with financial issues at work, leading to over 150 hours of lost productivity per employee annually.

Financial wellness as a business strategy

According to a 2023 Ernst & Young report, every dollar invested in financial wellness programs yields a $3 return in reduced stress, improved productivity, and reduced turnover.

“Financial wellbeing is no longer a nice-to-have but a core component of a holistic employee wellness strategy,” Ms Stoykov said. “Our research clearly shows that employers have a unique opportunity to create a more engaged, resilient workforce by investing in comprehensive financial wellness programs that address the real needs of their people.”

Evolution Media Group CEO Vanessa Stoykov.

The Growing Need for Financial Wellbeing in the Workplace report highlights the need for personalised financial support that evolves with employees’ life stages. For example, early-career employees need guidance on managing student loans and building credit; mid-career employees benefit from advice on mortgages, investments, and family financial planning; and late-career employees focus on retirement preparation and estate planning.

With 76 per cent of employers surveyed acknowledging the need to do more for their employees’ financial health, the report underscores a critical business case for investing in financial wellness programs.

The benefits are clear: reduced turnover, increased engagement, and stronger mental health outcomes. Employers that implement these initiatives position themselves as leaders in supporting employee wellbeing and can attract top talent.

Financial Wellbeing Collective General Manager Helena Jakupovic said a progressive organisation will see the value in investing in their employee’s financial wellbeing.

“Financial wellbeing is intrinsically intertwined with one’s overall wellbeing, and an employee’s state of wellbeing affects their health, their relationships and the ability to meet their work responsibilities. More and more organisations are realising it’s in their best interest to make financial wellbeing a key element of their employee wellness program,” Ms Jakupovic said.

The Financial Wellbeing Collective is a collaboration of partner agencies, including Anglicare WA and Uniting WA, whose mission is to empower Western Australians to achieve financial stability, resilience, and wellbeing. Engaged by organisations both locally and interstate, The Collective delivers workshop content that is tailored to the specific financial wellbeing needs of the employer’s staff.

The Collective works with corporates to help build strong financial resilience and wellbeing. “We work with corporates in two ways – building financial literacy and capability through our corporate workshop program – and instigating long-term behavioural change through our financial coaching program,” Ms Jakupovic said.

The Financial Wellbeing Collective has partnered with Keystart since 2019 to deliver a financial coaching program that is achieving real, on-going impacts for its participants.

“The power of financial coaching lies in uncovering one’s relationship with money, where a financial coach helps the participant understand the feelings and motivators that lie behind how they handle their finances,” she said.

“Financial coaching addresses behavioural change which is key to sustained outcomes, and as corporates should be focused on building their employee’s on-going resilience – financial coaching is a valuable area of investment.”