Financial stress is a key detractor from employee wellness and research suggests it’s an impairment to cognitive functioning, which can lead to a reduction in productivity.

A recent study which measured and analysed the experiences of a sample of South Africa’s working population saw almost 75% of employees rating 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 2% of the country’s GDP. Given the fact that the current socioeconomic status of South Africa is characterised by record-high unemployment, significant levels of poverty and increasing living costs, the need to implement measures that will increase labour productivity has never been more urgent.

This is according to an inaugural study, “The Floatpays State of Employee Wellbeing Barometer 2022”, which drew on both qualitative and quantitative methodology. It surveyed South African workers who represent a broad demographic in terms of age, gender, ethnicity, province and monthly household income. The study positions employee wellbeing programmes as a catalyst for change in the country’s labour productivity trajectory.

Central to the focus of the study were issues relating to financial stress as an important dimension of employee wellbeing.

Floatpays founder and CEO Simon Ward says: “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.”

According to the Barometer, one in five employee respondents reported high levels of financial stress. On scrutinising the contributing factors to this high level of financial stress, the survey found that 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.

Of particular interest to Ward and his team were the effects of financial stress as it relates to productivity levels. As the survey illustrated, the impact of financial stress manifests as a lack of concentration (54%), negative mood changes (51%), sleeping problems (50%) and eating-related issues (23%). The knock-on effect of these symptoms includes absenteeism, presenteeism, workplace errors and lower productivity levels.

Ward emphasises the 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. Financial stress – lower productivity – poorer profitability. It’s a slippery slope that South African employers have the power to curb by taking a holistic approach to nurturing employee wellness.” Ward explains.

Evidence suggests that there is a strong business case to be made for providing employees with financial wellbeing support. The overwhelming majority of survey respondents indicated that having their employer’s support in building their financial wellbeing would change their attitude to work (85%), shift their views on management and leadership (83%), improve their productivity (85%), and contribute positively to their physical and mental health.

Respondents also claimed that interventions like on-demand earned wage access would markedly improve their overall relationship with their employer. As the Barometer demonstrated, 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.

Floatpays chief people officer Andisa Liba, comments: “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.”