Key takeaways
Nine in 10 US adults reported feeling some type of financial stress at the start of 2026, according to a 2025 survey from the National Endowment for Financial Education.
At work, financial stress makes employees more likely to be distracted, cause accidents, miss work, and look for another job.
You can help reduce your team’s financial stress by raising wages, improving pay equity, expanding your benefits, offering financial wellness resources, and creating a more supportive workplace culture.
Money worries are a major source of stress in America. Rent, mortgages, car payments, and childcare costs can make it feel impossible to stay afloat for many working Americans. At the same time, small business owners are worried about losing their employees and attracting capable team members.
Could personal finance problems and lackluster retention be related? The answer, it turns out, is yes.
As a business owner, you have a unique opportunity to be part of the solution. With the right approach, you can help lower your employees’ financial stress and improve your business’s employee engagement and retention rates. Keep reading for a complete breakdown of how.
How does employees’ financial stress affect your business?
Employees aren’t robots who can switch off their stress on the job—they’re whole people who sometimes bring their personal anxieties into their work. When your employees are stressed about money, you might see:
More workplace accidents. Stressed workers are more distracted on the job.
Lower on-the-job engagement. Financially stressed employees tend to be less productive.
More health-related absences. Financial stress harms employees’ physical health and mental well-being. Stressed employees are more likely to experience fatigue, headaches, depression, or other ailments, leading to more sick days and higher rates of absenteeism.
Higher employee turnover. You might see more resignations as cash-strapped workers become more anxious to look for higher compensation elsewhere.
A step-by-step guide to easing your employees’ financial stress
Here’s some good news: there are practical ways to help your employees experience less financial stress in general—and cope more easily with the stress they do have. Try out these five ideas.
1. Improve your compensation package
The first step to supporting your employees through financial anxiety? Reevaluate how you compensate them. When employees feel secure with the amount of money they make, they’ll have less to worry about overall.
As a business owner, you need to make sure you’re paying employees fair, equitable (and ideally competitive) wages on a predictable pay schedule. Here are some questions to reflect on:
What is the average salary for my employees’ roles in this industry? What do my competitors pay their employees? How do my employees’ current wages stack up?
Is there pay equity across my workforce? In other words, do women and people of color make the same amount for the same work as their peers?
What is the cost of living where my employees live? When was the last time I did a cost-of-living wage adjustment across the board?
Do I give annual pay raises to employees?
Can I cut business expenses in other areas in order to offer my employees higher pay?
You may need to consult your business accountant for advice on how to boost employee wages without taking a significant hit to your profits, but it can be done. Your employees are the lifeblood of your business. Paying them well is an investment in your business’s success and longevity.
And don’t forget to review your compensation package regularly—annually at minimum, and ideally once a quarter.
2. Build out your benefits
Offering a variety of benefits is a great way to meet your employees’ diverse needs and supplement their salaries. Benefits help lower the burden of daily and monthly personal expenses.
Think of paid leave, for instance. Unexpected challenges and major life transitions (recovering from a surgery, caring for an aging parent, and bonding with a new baby, for example) can all pull people away from work.
If those people don’t have paid leave, they have two options: continue working in the midst of personal difficulty (potentially putting their family relationships or personal health on the line) or dig into their savings in order to take unpaid time off work. Both of those choices are steeped in financial stress and uncertainty.
When you provide paid leave to employees, though, you’re helping them meet their personal and family needs without sacrificing their paychecks and financial stability. Here are some other crucial employee benefits to consider:
Comprehensive healthcare: medical, dental, and vision insurance
Generous paid time off for sick days and vacation time, so employees don’t have to stress about taking time off to heal or relax
Caregiver leave
Mental health benefits, like complementary therapy sessions or subscriptions to meditation and wellness platforms
Life insurance and disability insurance
Pet insurance
Retirement plans (and 401(k) matching)
Yearly bonuses
Stock options
Commuter stipends
Professional development benefits, like tuition reimbursement, book stipends, or online course reimbursements
Employee discounts
Workplace wellness programs (like discounted fitness memberships or spa treatments)
Flexible spending accounts (FSAs), health savings accounts (HSAs), or a qualified small employer health reimbursement arrangement (QSEHRA)
Childcare stipends or assistance
3. Offer financial resources and education
Another strategy to minimize employees’ financial stress is to arm them with more money, knowledge, and resources. When employees have a deeper understanding of their personal financial situation and options, they can make more informed choices about their spending, saving, and investing strategies.
Consider these financial resources, in addition to financial benefits like 401(k) matching:
Financial literacy workshops: Hire a CPA or personal finance expert to host seminars (during working hours) on different financial health topics, like budgeting, building an emergency savings, or preparing for tax season.
One-on-one sessions with financial advisors: Hook your employees up with a financial advisor who can review their financial goals and offer them tailored advice to bolster their financial well-being.
Debt counseling: Pair your employees with a CPA who specializes in debt management, so they can get help negotiating or consolidating their debt, paying down student loans, or planning for their kids’ financial aid for college.
Flexible pay: Give your employees Gusto Wallet, so they can access their pay before payday to stay on top of bills, rent, and other expenses.
4. Offer schedule flexibility
Time is money. When you give employees more control over their working hours, you also give them more financial power. A remote worker, for example, saves money on gas and transportation costs. Plus, they can put the time they would’ve spent commuting toward household chores, self-care, or even personal admin and appointments, so they don’t have to use PTO to do it.
Giving employees more control over their work hours goes a long way, too. For a shift worker, for example, having the option to choose the late shift might mean they can split childcare duties with their partner, instead of having to shell out for daycare.
Here are some other options for building flexibility into your workplace:
Remote or hybrid work
Condensed work weeks
Flexible working hours
Part-time work
Choice and control of shifts
Expanded leave
More paid time off (or a minimum PTO policy, which ensures employees take the time they deserve)
Half-day Fridays
5. Create a stigma-free, transparent workplace culture
A poor workplace culture has the potential to contribute to or exacerbate employees’ financial stress, but a positive, supportive culture has the power to relieve it. As an employer, you set the tone for the entire operation, so it’s crucial to lead by example when you’re trying to change your workplace culture.
Here are several cultural changes you can make to lessen your employees’ financial worry:
Train managers and leaders to recognize signs of stress in employees. Think: increased absences from work, less engagement on the job, less interaction with co-workers, sudden change in work quality or performance, and making more mistakes on the job.
Prioritize empathy over productivity. Take a compassionate approach to talking with employees. Set up monthly one-on-one meetings with employees to check in, answer questions, set career goals together, and make sure they feel heard.
Get rid of mental health stigmas. Talk openly about your mental health benefits and resources, and encourage employees to take advantage of them. Set up quarterly lunch and learn sessions covering mental health or financial topics.
Dismantle hustle culture. Don’t encourage employees to work extra hours without overtime, to skip lunches, or to answer emails or take calls in their off hours. Discuss the importance of working while you’re at work—then embracing your time off. Encourage your managers and other leaders to set an example of a healthy work-life balance.
Recognize and reward employees regularly. Share positive feedback with employees, shout out their hard work to the rest of the staff, and reward them with perks, bonuses, and gifts.
Promote compensation transparency. Make sure employees know exactly what they need to do to earn a raise, bonus, or promotion in their jobs. It’s a good idea to outline promotion guidelines, raise discussions, and bonus/commission eligibility requirements in your employee handbook.
Less financial stress means more on-the-job success and satisfaction
Your employees’ financial stress is your problem, too. With some intention and extra cash flow, you can give your employees more options, more confidence in their financial decisions, and more padding in their paychecks.
FAQs
How does financial stress affect employee performance and productivity?
Financial stress can negatively affect employees’ on-the-job performance at work. They might be distracted, disengaged, and more likely to make mistakes, all of which can reduce productivity. Plus, they might start missing work because of stress-induced health issues, or quit to find better compensation at a new job.
How can employers help reduce employee financial stress?
Employers can do a ton of different things to help employees feel less financially stressed: raise wages; improve and expand their benefits package; ensure pay equity; offer financial planning, financial coaching, and financial literacy resources; communicate promotion and raise expectations clearly; and give employees more flexibility at work.
What benefits help employees manage financial stress?
Financial benefits like FSAs, HSAs, and 401(k)s can help employees feel more prepared to manage daily expenses and long-term savings. Financial wellness programs can also help employees feel more confident managing their debt or investing for the first time. Meanwhile, mental health benefits like therapy and employee assistance programs (EAPs) can give employees the emotional coping tools to deal with financial stress and anxiety.
Why is employee financial wellness important for businesses?
Employee financial wellness benefits businesses on every level—with workplace productivity, employee retention rates, and their bottom line. When employees feel financially secure and knowledgeable, they’re more likely to excel at work and stick around.
