How Important is Financial Wellness to Employees?

Money worries are something we all have, especially with the unpredictable market and rising inflation. It is not surprising that many people are experiencing financial stress in their personal lives. Financial stress can manifest itself in a variety of ways, including physical and mental fatigue, distraction at work, and decreased productivity. According to PWC, financially stressed employees are nearly five times as likely to admit personal finance issues have been a distraction at work.  Think about the massive productivity hit! While it’s not up to employers to solve all their employees’ problems, poor morale and low productivity are not the best for business. In this article, we’ll dive into how employers can play a role in improving their team’s financial well-being. 

Why Should Employee Financial Wellness Matter to Employers?

If you’re running a business, you know that worrying about money can be very detrimental. It affects a person both personally and professionally at work.

As an employer, employee financial wellness matters because it directly impacts your organisation. When employees are financially stressed, they’re less focused, more distracted, and often less motivated. If your employees are facing financial stress, you’ll notice the following in your workplace:

1. A Drop In Productivity

Another study showed that 70% of employees with low financial well-being were categorised as low performers. Employees spend nearly three hours per week dealing with financial worries during work hours. This distraction can equate to a part-time job, leading to substantial productivity losses for employers.

2. Lateness to Work

Additionally, financial stress also contributes to employees arriving late to work. Employees facing financial stress end up being 34% more likely to arrive late to work, which can disrupt team dynamics and overall productivity throughout the day.

3. Frequent MCs and Absenteeism

Employees with money worries also tend to miss 3.5 work days a year, almost double that of people with financial wellness. On the other hand, employees who are financially secure are less likely to take time off due to stress-related issues. This results in fewer disruptions and a more consistent workflow.

4. Higher Turnover Rate

AKPK reported that 91 percent of employees with high financial well-being were loyal to their companies, compared to 89 percent of employees with poor financial well-being who were actively seeking new jobs. Naturally, when people are unable to meet their financial obligations (retirement savings, school loan repayments) on the salary your company offers, they will actively seek opportunities from a company that pays a higher salary.  

5. Presenteeism

Your employees may also display another form of unhealthy work attendance, known as presenteeism. In some cases, employees work despite being sick, which may result in higher health care costs for your company later. The average annual cost of health-related absence and presenteeism per organisation in Malaysia is estimated at RM2.7 million. Additionally, this can also lead to an unhealthy work culture, poor working conditions, and decreased productivity.

How to Include Financial Wellness in Your Company Package

1. Educate Employees on the Importance of Financial Literacy

Did you know that while 74% of Malaysian working adults are keen on learning more about personal finance, only 48% of companies actually offer these financial courses?

By providing financial literacy resources—like workshops, seminars, or even online courses on topics such as budgeting, saving, investing, and managing debt—you’re helping your employees take control of their financial future. When your team has the tools to make informed financial decisions, they’re less stressed and more focused at work. It’s a win-win for everyone!

2. Offer Earned Wage Access for Financial Wellness

Beyond financial literacy education, consider offering employee benefits that promote financial wellness, like earned wage access. With the rising cost of living, 28% of full-time employees report always running out of money between paychecks. Having the option to withdraw earned wages before payday can be a real game-changer for both your employees and your business.

Earned wage access (EWA), also known as instant pay, is a financial service that allows employees to access a portion of their earned salary before their scheduled payday. 

79% of employees have expressed a greater willingness to switch to employers offering EWA. By giving your employees the financial flexibility to cover unexpected emergencies or monthly expenses, you provide them with the assurance and peace of mind they need to manage their finances better. When employees feel supported in this way, they’re less stressed and more focused, leading to better productivity and job satisfaction.

3. Simplify Your Payroll with Setgaji’s Flexible Financial Solutions

Now, if you’re wondering how to make this happen without causing cash flow headaches, Setgaji has you covered. Setgaji is a financial wellness platform designed to simplify the process, offering a streamlined payroll system that takes care of your payroll costs upfront, letting you repay them later. This means you can offer early-wage access without any financial strain on your company.

With Setgaji, you also have the flexibility to customise withdrawal limits for each employee. And the best part? It’s a paperless, hassle-free solution that gives your staff instant access to their earnings anytime, without adding extra admin work or costs for your organisation. Setgaji is all about making financial wellness easy for both you and your employees.

Learn more about Setgaji

Conclusion

Investing in employee financial wellness isn’t just about offering a pay cheque; it’s about fostering a work environment where employees feel secure, supported, and valued. Benefits that truly address employees’ needs can make a big difference in attracting and retaining top talent. By offering financial wellness perks, you’re not just helping your employees—you’re also building a stronger, more loyal team that’s ready to stick with you for the long haul. Start taking steps today to improve financial wellness in your organisation, and you’ll likely see the positive impact it has on your team and your business.

To gain deeper insights, watch the full video on MrMoneyTV’s YouTube channel.

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