HR Insights
April 3, 2023

It’s time for organizations to tackle the hidden health cost of money stress at work

Financial stress is at an all-time high, and it’s taking its toll at work. Designing the right employee financial wellness offerings – like on-demand pay – can help companies reduce turnover, lower absenteeism, and improve productivity.


We’ve all heard the stats on how financially stressed people are today. For years, the average American has been living paycheck to paycheck, but the toll this cycle is having on mental health has risen significantly: According to a 2022 study conducted by the Harris Poll on behalf of Ceridian, three in five employed North Americans are more stressed about their finances today than they were a year ago.[1]

While employers may dismiss employees’ finances as a personal matter, the stress associated with financial instability significantly impacts business. For example, the same 2022 study referenced above, found that 82% of American employees spend time thinking about personal finances during the workday.[2] Similarly, PwC found that 18% of employees said their financial stress in the past year had a major impact on their productivity at work, with 15% admitting it has also impacted their work attendance.[3]

And financial stress isn’t just affecting employees’ health and productivity, it’s also determining how they navigate their career decisions. Finances determine which job offers people can afford to accept or whether or not they can dedicate their time to upskilling themselves to prepare for the future of work. Finances also dictate when people can retire, and subsequently, when opportunities open up for the next generation. All of these factors have a trickle-down effect on an organization’s ability to attract and retain top talent, to have the right skills represented, and to get the best work out of their people.

How financially well – or unwell – is the workforce?

Let’s start with healthy spending. Debt has always been a serious issue for a lot of Americans. According to a 2021 study conducted by Oportun, one in five Americans with poor, no, or unknown credit said they don’t make payments to their credit card every month, and 43% only pay the minimum amount due.[4] Without a reliable payment structure in place, consistently borrowing credit can result in excessive debt and interest rates, as well as a negative impact on your credit score.

Saving for emergencies and future planning are also significant weak spots. A recent annual emergency savings survey found that fewer than 25% of people have enough savings to pay for an unexpected expense of $1,000, leaving the majority with no other option than to borrow money, use credit, or apply for a loan.[5] 

The impact of employee financial stress

Financial stress has a profound impact on people. Not only does stress itself harm people’s physical health, concerns about the cost of healthcare can cause employees to avoid seeking treatment for symptoms or put off routine tests and check-ups that would help prevent more serious illness.

Being financially stressed can also lead to an increased reliance on payday loans, resulting in high fees that can create a never-ending cycle of debt – and stress. To put the scale of this issue into perspective, there are more payday storefronts in the U.S. today than there are McDonald’s restaurants.[6]

Employees’ financial stress can have several negative impacts on organizations. When people are unhealthy – mentally and/or physically – that translates to higher employer healthcare costs and an increase in sick days. Absenteeism then affects the rest of the workforce, as other employees work overtime to pick up the slack from absent workers. Lowered productivity due to distraction is another issue, as is increased turnover. And, finally, older workers may delay their retirement due to higher benefits costs or not being financially prepared, which limits the upward mobility of younger workers.

How to support employee financial wellness through on-demand pay

The scope of employee financial wellness is broad. Having a 401(k)-matching program doesn’t mean an organization has financial wellness covered. Supporting financial wellness holistically means offering programs that address the employee’s complete financial picture, from health benefits to retirement planning to debt management.

While building a full financial wellness program is a large undertaking, a great place to start is by offering on-demand pay – also known as “earned wage access”. On-demand pay gives your people access to their wages as soon as they earn them, creating more flexibility and reducing dependence on credit and payday loans.

Here are a few of the benefits of on-demand pay when it comes to financial wellness:

Greater financial inclusion

Offering an on-demand pay solution that doesn’t rely on traditional financial institutions can help create financial inclusion. This means providing equal opportunities to access financial services, even for those who don’t have a bank account or a traditional relationship with a financial institution.

Financial inclusion not only creates more opportunities for your people to fully participate in the economy, but it also empowers them to have more control over their own financial wellness – which helps reduce financial stress. A study conducted by SSRS on behalf of Ceridian, found 81% of on-demand pay users said that Dayforce Wallet, an on-demand pay solution, provides them with freedom and accessibility, and 61% said it has helped improve their financial situation.[7]

Flexibility for tackling unexpected costs and improving mental health

Traditional fixed pay cycles are based on historical practices and outdated technology. The lack of flexibility of pay cycles can contribute to employees’ financial stress. If an employee faces an unexpected cost between pay periods, they may have to turn to high-interest loans to get by, significantly increasing financial stress. A recent survey studying US-based employees who use Dayforce Wallet found that 71% often run out of money between pay periods and 27% often can’t cover a week’s worth of household expenses let alone an emergency cost they didn’t plan for.[8]

Providing your people with a flexible pay solution puts them in the driver’s seat of their finances by giving them more financial control and reducing stress. Since relying on credit and payday loans causes harm to people’s finances, pay flexibility can help reduce the financial worry that impacts productivity.

Seventy percent of Dayforce Wallet users surveyed in the SSRS research report a positive impact on their mental health because of earned wage access.[9]

Increased engagement, productivity, and loyalty

When your employees are under financial stress and focused on resolving personal financial troubles, they may become disengaged in their professional life. They may be there physically, but their minds are elsewhere. This can lead to lost productivity and increased absenteeism.

We saw in the SSRS research a direct correlation between offering on-demand pay and decreasing absenteeism. For example, 56% of Dayforce Wallet users surveyed between the ages of 18-29 said they feel more inclined to pick up extra shifts/work because they know they will have access to those wages by the end of the shift.[10]

Supporting financial wellness can also help organizations tackle labor shortages. Growing a natural brand affinity among workers can help organizations attract and retain the right people. Sixty-five percent of on-demand pay users surveyed would recommend their employer because they offer Dayforce Wallet as a benefit.[11]

On-demand pay can also help with retention. For example, 45% of users aged 18-29 surveyed say Dayforce Wallet is one reason they are staying with their current employer, and 20% say they wouldn’t even work for an employer that didn’t offer on-demand pay as an employee benefit.[12]

Offering earned wage access can help organizations stay competitive when it comes to attracting and retaining top talent.

Final thoughts

Investing in employee financial wellness is a strategy that will benefit employees and organizations alike. For one, improving employees’ financial stability can increase the ROI on labor costs by lessening employees’ financial stress so that they can focus on their work, increasing their productivity and reducing absenteeism.

Supporting financial wellness can also be a powerful tool for recruiting and retaining top talent, as employees are likely to place a high value on opportunities to improve their financial stability, health, and overall wellness. Improving employee financial wellness should be a top priority for organizations to build a stronger, more resilient workforce.

This post was originally published on May 20, 2020 and was updated on April 4, 2023 for recency and to include new perspectives on the topic.

[1] The Harris Poll North American Study on behalf of Ceridian, 2022

[2] The Harris Poll North American Study on behalf of Ceridian, 2022

[3] PwC Financial Wellness Survey, 2022

[4] 2021 survey conducted by OnePoll on behalf of Oportun, of 2,000 Americans with poor, no, or unknown credit

[5] Bankrate’s 2023 annual emergency savings report

[6] CNBC, Payday loans can have interest rates over 600%—here’s the typical rate in every U.S. state, 2021

[7] SSRS Research Study on Dayforce Wallet users conducted on behalf of Ceridian, December 2022

[8] SSRS Research Study on Dayforce Wallet users conducted on behalf of Ceridian, December 2022

[9] SSRS Research Study on Dayforce Wallet users conducted on behalf of Ceridian, December 2022

[10] SSRS Research Study on Dayforce Wallet users conducted on behalf of Ceridian, December 2022

[11] SSRS Research Study on Dayforce Wallet users conducted on behalf of Ceridian, December 2022

[12] SSRS Research Study on Dayforce Wallet users conducted on behalf of Ceridian, December 2022

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