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Key Takeaways
- Affordability and productivity are two sides of the same problem, and business leaders influence both.
- Employee financial stress is a hidden productivity tax that costs companies the equivalent of a full workday per employee every week.
- Leaders who help employees move from paycheck access to long-term financial stability create measurable productivity gains.
When you read the newspaper these days, you’re bound to see stories on affordability. There is broad consensus on the importance of making life more affordable, especially for everyday Americans.
And if you flip to the business section of the newspaper, you’ll undoubtedly read about corporate productivity initiatives. From AI deployment to workforce optimization, enterprises are hyper-focused on improving labor productivity.
What you won’t see is a story connecting these two issues — affordability and productivity. That is the story I’m sharing today.
The employer’s role in the affordability crisis
Entrepreneurs love solving pain points. Every successful startup I’ve studied, including my own, has solved a critical problem. And the bigger the problem, the bigger the opportunity. Sometimes, the problems are so big that we think they’re not solvable.
Take affordability. What can a single business leader do to make essentials like utilities, housing and groceries more affordable for working Americans? Quite a bit if you shift your focus to your own employees. With a holistic financial wellness approach in the workplace, paychecks go further, and life becomes more affordable.
In 2015, I pioneered earned wage access in my basement for this very reason. At the time, workers were spending $15 billion in fees for overdraft and payday loans because their paychecks came after their bills were due. Our solution was to convert their accrued earnings into a real-time digital pay balance so they could pay their bills on time and avoid predatory fees. Earned wage access was born and quickly became a billion-dollar benefits category. Life became a little more affordable.
But that was just the first step. Real affordability comes with savings. Workers who consistently save are better prepared to absorb rising prices and emergency expenses. But here’s the problem: Data reveals that 54% of Americans are unable to save at all — a problem that has persisted for years.
The link between financial stress and lost productivity
So what does that have to do with productivity? Everything. Workers without savings experience high levels of financial stress. And financial stress is a productivity killer. The National Bureau of Economic Research found that workers without emergency savings spend 8.2 hours every week in the workplace, distracted by money problems. That’s a full workday of non-productive work every week.
New research from Everest Group reveals how employers are deploying financial wellness to enhance operational performance and employee productivity. When you get your employees to save, productivity soars.
Henry Ford knew this. When he introduced the moving assembly line in 1913, his workers struggled to adapt to the fast-paced conveyor belt. Absenteeism was high, and job turnover reached a whopping 370%. Once craftsmen, they now felt like cogs in a machine. Today’s workers who are anxious about AI may recognize this feeling of insecurity.
Ford knew his workers needed to feel stable to be productive. So he introduced a new benefit — savings. When he increased wages to $5 a day, the additional money was put into a forced savings account, creating a sense of financial security and stability. The result? Production time dropped from 12.5 hours to 93 minutes, and the Model T Ford was affordable for the everyday American, including his very own workers.
This is the flywheel of the American dream. When workers are able to save, life becomes more affordable, and work becomes more productive. And when work becomes more productive, the cost of goods and services drops — making life even more affordable, which makes work more productive. And so on and so on.
For the 69% of workers who aspire to be financially healthy, that flywheel seems broken. They are coping at best and are too often dealing with financial problems or mentally overwhelmed by them. To perform at work, we have to be thinking about work, not our bills.
Business leaders increasingly get this: 97% of enterprises feel responsible for employee financial wellness, up from 41% in 2013. The feeling is mutual, with two out of three employees ranking financial well-being as their #1 support need.
Some are taking matters into their own hands. Four in 10 workers have taken a second job to manage expenses, and 27% of full-time employees prefer a side hustle. In my experience, these tend to be the best employees. Their divided attention poses grave productivity risks.
The best way to approach employee financial wellness
Employers offer a range of solutions from financial education to earned wage access to emergency savings accounts. These all serve important goals, but when offered as separate apps, there can be friction and low engagement. 91% of financial app users prefer a single platform to meet all of their needs. And for HR teams, single products add admin burden and are difficult to measure ROI.
8 out of 10 enterprises struggle to see positive financial health outcomes from their wellness programs, and they are now demanding a modern platform that integrates savings, credit building, no-fee earned wage access, financial education and more.
The best business leaders approach financial wellness as a holistic program, not a one-off perk. When employees move from paycheck-to-paycheck survival to even a small financial cushion, stress drops and focus returns. The opportunity is not to add another benefit. It is to build a workforce that is stable enough to perform at its best. Companies that implement these strategies often see significant productivity gains, in some cases as high as 40%.
Executives can’t control the price of groceries or rent. They can control whether their workforce has the financial stability to stay focused and engaged. For companies serious about performance, financial wellness is no longer optional. It is foundational.
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Key Takeaways
- Affordability and productivity are two sides of the same problem, and business leaders influence both.
- Employee financial stress is a hidden productivity tax that costs companies the equivalent of a full workday per employee every week.
- Leaders who help employees move from paycheck access to long-term financial stability create measurable productivity gains.
When you read the newspaper these days, you’re bound to see stories on affordability. There is broad consensus on the importance of making life more affordable, especially for everyday Americans.
And if you flip to the business section of the newspaper, you’ll undoubtedly read about corporate productivity initiatives. From AI deployment to workforce optimization, enterprises are hyper-focused on improving labor productivity.
