Financial stress impacts on employee wellness and productivity, study reveals

South African employers find themselves having to manage financial stress, lower productivity and poorer profitability.

A recent study that measured and analysed the experiences of a sample of South Africa’s working population found that almost 75 percent of employees rated their level of financial stress as medium to high.

In South Africa, losses in productivity equate to 128 million days, which accounts for R38 billion or around two percent of the country’s GDP.

The Floatpays State of Employee Wellbeing Barometer 2022 commissioned by Fintech start-up Floatpays, reveals that with a record high unemployment rate,significant levels of poverty and increasing living costs, the need to implement measures that will increase labour productivity has never been more urgent.

South African workers who represent a broad demographic in terms of age, gender, ethnicity, province and monthly household income, were surveyed for the study.

The study positions employee wellbeing programmes as a catalyst for change in the country’s labour productivity trajectory.

It focused on issues relating to financial stress as an important dimension of employee wellbeing.

Floatpays founder and CEO, Simon Ward said about the study: “With the launch of this study we hoped to gain insights into the current state of employee wellbeing in South Africa, homing in on the factors that influence labour productivity. What we found was that the general wellbeing of South African workers is average at best.

“When we get to the crux of what constitutes employee wellbeing, two key factors come to the fore: the condition of the working environment and the level of financial stress amongst employees.”

The study reveals that one in five employee respondents reported high levels of financial stress.

According to the study, the majority of South Africans are struggling to meet their basic financial obligations, which include everyday expenses such as food, household costs, rent and transport/fuel.

The research notes that employees who suffer from financial stress suffer from lack of concentration, sleeping problems, and eating-related issues. “The knock-on effect of these symptoms includes absenteeism, presenteeism, workplace errors and lower productivity levels,” the study reads.

The majority of the respondents also indicated that having their employer’s support in building their financial wellbeing would change their attitude to work (85 percent), shift their views on management and leadership (83 percent), improve their productivity (85 percent), and contribute positively to their physical and mental health.

The respondents also indicated that interventions like on-demand earned wage access would markedly improve their overall relationship with their employer.

According to the study, the path to employee financial wellbeing needs to be paved with financial know-how on aspects such as better money management, assisting employees to reduce their reliance on debt and encouraging healthy saving habits.

Commenting on the findings of the study, Simon says there is a need for employers to acknowledge the linear correlation between financial stress, employee wellness, productivity levels and ultimately, profitability.

“Employee Wellness Programmes (EWPs) that focus on uplifting and empowering employees by means of financial education and support, have the potential to change the trajectory of labour productivity in South Africa,” says Simon.

Elaborating on this finding, Floatpays’ chief people officer, Andisa Liba says: “What South African employers need to realise is that the solution to a more fulfilled, functional and productive workforce is within their grasp.

“The power that technology has to become an enabler of this solution should not be underestimated. For us, that solution exists at the intersection between fintech and HRTech, within a working environment that sees the true value of its employees. Today’s employers need to reach beyond fair remuneration. To attract and retain the kind of workforce that will translate into positive and profitable returns, employers need to think creatively about how to optimise their employee wellbeing programmes.”