Is Financial Stress Eating Up Your Profits?

Feb 14, 2019

Is Financial Stress Eating Up Your Profits?

Financial stress is a silent killer that may be robbing your business of thousands or even millions of dollars of profit annually.  Mercer estimated that employers lost approximately 250 billion in wages in 2017 because of financial stress1.  The survey which was based on 3,000 workers found that employees are spending approximately 150 hours annually during work time on financial issues1.  Seventy percent of HR professionals say financial stress is impacting their workforce.  In addition, financial stress can also lead to increased absenteeism, lower productivity, and higher healthcare costs.  Many Americans are anxious about their retirement security and for good reason, companies have abandon the Defined Benefit pension plan, for the Defined Contribution or 401(k) plan.  Two thirds of employees age 55-64 don’t have enough in retirement savings to cover one year of income.  Sixty three percent of our workforce doesn’t have enough in a rainy day fund to cover a $500 emergency2.  Seventy eight percent of people surveyed by Prudential say they don’t feel financially secure3.  For this reason, financial wellness programs are gaining momentum as employers are placing greater importance on the benefit programs they provide to employees.  The reality is, employees aren’t taking the appropriate steps to financially prepare for their future.  Financial education in the workforce has been found to help reduce stress, increase company profits by $2,000 per employee in increased productivity annually, reduce healthcare expenses, and help employees better utilize benefits4.  Research shows that companies are getting a 3:1 return on every dollar spent on financial wellness4.  Financial stress has a clear cost to employers and financial wellness programs have both tangible and intangible rewards for employers looking to differentiate their brand, improve the engagement of their people and add to the bottom line in terms of enhanced productivity.   Getting Employees “retirement ready” requires more than just providing a good 401 (k) plan.  Call us to discuss which financial wellness options are right for your employees.

  1. Mercer “inside Employee Minds Survey” August 16, 2017
  2. McGrath, Maggie, “63% of Americans Don’t Have Enough Savings to Cover a $500 Emergency,” 2016
  3. Prudential, Financial Wellness Consumer Research, 2016
  4. Stephen Miller, CEBS,is an online editor/manager for SHRM.​ Study: Wellness Programs Saved $1 to $3 per Dollar spent    September 12, 2012

 Written by:  Todd Rohrer, Client Advisor

 These are the opinions of Todd Rohrer and not necessarily those of Cambridge, are for information purposes only, and should not be construed or acted upon as individualized investment advice.  Investing involves risk.  Depending on the types of investments, there may be varying degrees of risk.  Investors should be prepared to bear loss, including total loss of principal.  The strategies discussed herein are not designed based on the individual needs of any one specific client or investor.  In other words, it is not a customized strategy designed on the specific financial circumstances of the client.  However, prior to opening an account, Cambridge will consult with you to determine if your financial objectives are appropriate for investing in the model.  You are also provided the opportunity to place reasonable restrictions on the securities held in your account.