The Impact of Financial Wellness on Employee Productivity and Retention

With the rising cost of living, unexpected expenses, and mounting debt, employees face unparalleled levels of financial stress. This financial distress often leads to distractions at work, increased absenteeism, and, sometimes, employees resign to seek higher-paying jobs or more supportive employers. According to a survey, 73% of financially stressed employees are attracted to an employer that cares about their financial well-being. The correlation between financial wellness and productivity is evident, as financially stressed employees are less likely to be focused, engaged, and productive at work.

When employees are distracted by financial worries, it affects the overall work environment and operational efficiency of a company. In fact, 56% of employees distracted by financial stress spend over three hours per week preoccupied with their personal finances. Financial stress extends far beyond bank accounts, affecting various aspects of an individual’s well-being. At the workplace, this results in lower productivity, reduced morale, and frequent absenteeism, which disrupt workflows, delay project timelines, and increase the workload on other team members. Moreover, high turnover rates due to financial dissatisfaction can lead to increased recruitment and training costs, further straining the company’s resources.

In addition to this, employers often face challenges when employees request advance salaries to meet their immediate financial needs. Traditionally, processing advance requests involve administrative overhead, manual processing, and cash flow disruptions, making it difficult for companies to maintain smooth financial operations. This situation creates a dilemma where the company wants to support its employees but struggles with the practicalities of doing so without affecting its financial stability.

In the face of challenging economic times, employers are increasingly turning to Earned Wage Access (EWA) as an added benefit for their workforce. EWA is an innovative solution that empowers both employees and employers. EWA allows employees to access a portion of their earned salary before their scheduled payday, providing immediate financial relief without the need for payday loans or advances. For employers, EWA simplifies the process of supporting employees’ financial needs without disrupting cash flows or increasing administrative burdens.

ABHI has been at the forefront of providing EWA solutions, significantly empowering both employees and employers financially. With AbhiSalary, an Earned Wage Access solution, employees get the flexibility to withdraw their hard-earned salary, making every day a payday. It enables employees to regularly meet their financial obligations by allowing them to access their earned salary through the ABHI mobile app and SMS within 30 seconds.

ABHI’s EWA solution offers the following benefits:

For Employees:

  1. Access a portion of their earned salary whenever they need it.
  2. EWA is not a loan, so the employee cannot overspend; no interest payments, only a fixed nominal service fee.
  3. No financial stress in case of unexpected expenses.

For Employers:

  1. Increased productivity due to reduced financial stress, thus increasing employee focus.
  2. Reduced workload on HR and Finance.
  3. Improved employee retention and reduced turnover rate.

In conclusion, financial wellness is a critical factor influencing employee productivity, engagement, and retention. Earned Wage Access offers an innovative, efficient, and impactful solution that benefits both employees and employers. By adopting EWA, companies can create a more supportive and productive work environment, driving overall business success.

 PwC. (2023). PwC’s 2023 Employee Financial Wellness Survey. [online] Available at: https://www.pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html 

 PwC. (2023). PwC’s 2023 Employee Financial Wellness Survey. [online] Available at: https://www.pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html