The rising cost of living is more than just a personal burden for American workers; it's a significant drain on workplace productivity and overall employee wellbeing. With financial stress increasingly impacting mental health, employers are facing a critical challenge: how to support their teams and safeguard their bottom line.
Tanner Bergman, Head of Wellbeing at Paycom, dives into the profound effects of financial concerns on the modern workforce, exploring how lost productivity translates into substantial costs for businesses.
The cost of living has been increasing, and many Americans today are concerned about their financial wellness, which is impacting their mental health. What effect does this have on employees’ productivity in the workplace?
If attention is split between personal and professional concerns while at the office or on the clock, productivity and job performance will undoubtedly be impacted. According to BrightPlan’s Wellness Barometer Survey results, employees are losing an average of 7.3 hours of productivity each week due to financial concerns, costing U.S. employers potentially $183 billion annually in lost productivity and engagement. To combat this, employers should empower their employees to improve their pay literacy and take control of their financial wellbeing through transparent processes and conversations.
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For example, at Paycom, we offer Beti®, a tool that automatically finds errors and guides employees to fix them before payroll is processed. Proactively empowering team members to address their concerns can make a significant impact in protecting productivity.
How can companies make sure they are offering effective financial wellness programs for employees?
Pay literacy is a vital piece of financial literacy, and when employers put an emphasis on supporting their employees’ pay literacy, it benefits workers’ overall wellness. Leaders can determine if the programs in place are effective by understanding what their employees are asking about their paychecks and taking note of when the number and frequency of questions decreases.A foundation of pay literacy is critical because financial stress can hinder employees’ productivity and broader wellbeing, too.
It's clear that financial assistance and other employee wellness initiatives benefit employees, but what is the impact for businesses? How can you understand if these initiatives work?
The business impact of financial and mental wellness initiatives can be seen through feedback from HR teams and employees, via productivity measures and in employee retention trends.
According to a 2024 Employee Wellness and Mental Health survey commissioned by Paycom and conducted by PSB Insights, 92% of HR professionals rate their employee wellness benefits as effective. Also, 90% reported an increase in productivity and 89% saw an improvement in morale since implementing employee wellness benefits. This shows that from a cultural perspective, wellness initiatives are benefiting employees, which ultimately benefits the business.
Also, internal data from Paycom shows there is increased retention with employees who have interacted with wellbeing programming when compared to those who have not. Research also indicates companies with higher wellbeing scores consistently achieve greater valuations, higher profits and superior returns on assets.
Related: Financial literacy: 87% of employees say it’s a must-have benefit
Why do you think it’s important for companies to celebrate Mental Health Awareness Month?
As Mental Health Awareness Month comes to a close, it's important to acknowledge that it provides an opportunity to remove the stigma around mental health. It’s a time to let employees know that mental health is real health and they have resources available to them year-round. This is also something I am deeply passionate about, and I know Paycom takes it very seriously as an organization.
Intentionality also plays an integral part in celebrating wellbeing throughout the year. High-impact initiatives such as automated PTO technology, accessible telehealth services and leadership-focused programs can deliver real ROI and support a culture of holistic wellbeing. In contrast, isolated wellness events, free swag or unintegrated meditation apps tend to be forgettable and have a lower impact. The key is integrating mental health support into everyday workplace culture, not just during a designated month.
Can you share advice for benefits managers hoping to implement a mental health program, whether it’s focused on financial wellbeing or something a bit broader?
When implementing a mental health program, benefits managers should prioritize comprehensive, ongoing mental health support rather than one-off events. High-impact initiatives can include telehealth mental health services, privacy pods to take those appointments and regular sessions to have human conversations.
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