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Why Financial Instability Leads To Reduced Productivity At Work

Understanding how financial instability leads to reduced productivity is a critical element of being a top employer to think, perform, and function.
August 5, 2021

Employees come to work to make money. As an employer, you know what your employee makes each week, but their financial picture may not be quite what you expect. Even employees or workers that make a healthy living could be struggling with economic instability. When employees have financial worries, there will be reduced productivity at work. However, these worries go well beyond the workplace. Understanding how financial instability leads to reduced productivity is a critical element of being a top employer.

How Financial Instability Impacts Mental Health

Whether we like it or not, financial success is a way to determine overall success. Those that have not reached financial freedom will find that the mental health-related issues can become overwhelming. Here are a few of the ways that financial instability will impact mental health.

Reduced Sleep

Most Americans are not getting enough sleep. The recommendation to get seven or more hours of sleep can seem impossible for some. Between having to work, shuffle kids around and take care of a home, it’s hard to get enough sleep. When employees are up at night worried about paying the mortgage, there is very little sleep to be had.


It’s easy to fall into a depressed state when you feel that your efforts to achieve financial freedom are unsuccessful. Employees become depressed when their work is not satisfying, and it doesn’t cut it from a financial perspective.


When employees start to procrastinate, it is typically because the work is not getting them the pay they need or deserve. When people are motivated to make money and have a clear mental outlook, they will get the job done.


Inability To Get Along With Coworkers

Financial instability can cause employees to see themselves in a different light and become either competitive or withdrawn. This can cause issues in the workplace between coworkers.


Anxiety often stems from worries about what is going to happen in the future. For those that are having trouble with money in the present, the future can seem daunting. Financial instability will lead to anxiety issues that could sometimes take years of therapy and other methods to overcome.

The Physical Effects of Stress

In addition to the mental impacts that financial instability will bring with it, there are also some physical impacts. Those with physical impacts of stress could end up needing more time off or having issues putting in an entire workday.

Some of the most common physical effects of stress to look out for include:

  • Headaches
  • Stomach Aches
  • Back Pain
  • Palpitations
  • Frequent Illness
  • Insomnia
  • Muscle Aches
  • Lower Energy
  • Teeth Grinding

How to Support Stressed Employees

When you notice that some of your employees are struggling with financial instability, it is best to step in and find a way to help. Although you will want to take some of the stress off their plate, the result will also benefit you. As the employer, when your employees are stress-free, you will see increased productivity in the workplace.

Understanding & Listening

Some employees will assume that their employers will not care about their financial stress. It is good to keep an open dialogue between you and your employees. Let them know that you care and that you are willing to listen. This is not just about asking for more money; it is about living a healthy life.


If you have reached financial freedom, it can’t hurt to offer a bit of advice. Maybe your employee is making a mistake with their finances, and it is causing them more stress. Explain that you may not be an expert, but you have suggestions that could help.


As a good employer, it is wise to have a list of resources to help any employee in need. Whether you have personal connections or have tried a service yourself, be open about available resources. Most people who are stressed will not know where to look for the help that they need.

Ways to Financially Support Employees without Raising Wages

Raising wages may be difficult. For some businesses, the ability to raise a worker’s compensation to get them to the point of financial stability is impossible. However, there are ways to help without raising wages.

Early Wage Access

Potentially the best way to help employees with financial instability is to get them their money faster. Early wage access gives people the ability to use their earnings before payday comes. With more than 120 million Americans living paycheck to paycheck, employees will benefit from getting their money quickly.


Financial Coaches

Financial coaches can give workers goals, lay out plans and even help them realize how they are misspending their money. As an employer, a service such as Rain that will offer employees financial coaching and assistance is invaluable.

Discounts and Services

If you can’t offer your employees more money, but you can help them save somewhere else, it may do just as much good. How about being able to give them a discount on car insurance? A reduced fee for wellness services? Cheaper prescriptions? There are many discounts and services that can help reduce the overall stress that an employee must deal with on an ongoing basis. These are available through Rain as well.

Financial Instability Has No Place At Work

As you can see, there is nothing positive that will come out of a stressed employee. Taking time to listen and care about your workers and then get the benefits they need is the best way to overcome this workplace issue.

Financial instability will limit a person’s ability to think, perform, and function. If an employee is worried about paying for groceries, how can they do the best job for you?

Think about these things and try to be as creative as possible when creating solutions to help both your employee and your business.

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