Is financial stress undermining employee performance?
Mary Haynes was confronting a serious threat to her organization.
As President and CEO of Louisville-based Nazareth Home, Sacred Heart Home, she's responsible for one of the leading providers of long-term care and senior living in the state of Kentucky. What she knew was that many of her employees struggled — at least, periodically — with financial distress.
“Imagine how challenging it is for the mother who needs extra childcare, food or gas before the next paycheck is due,” Mary says. “She may be working extra hours to pay for something extra, but traditionally she has to wait until payday to actually receive the money. Also, people get behind and have to try and borrow money until their next paycheck.”
I imagine you can empathize. After all, Ms. Haynes is hardly alone as this report on financial wellness challenges facing aging care providers demonstrates.
Such problems, as Mary realized, could contribute to personal turmoil and even employee churn. Depending on which employee population you're measuring, and who's doing the measuring, the average employee turnover in this category is roughly 40% to 50% a year, with some institutions experiencing annual worker turnover rates of 100% or more.
But employee churn isn't the only problem that's impeding growth and eroding performance. Employers are also hampered by employee disengagement. Engagement can generally be defined as the degree to which a worker is psychologically committed to their job.
AON Hewitt, in its 2017 survey on employee engagement, suggests a simple “Say, Stay, Strive” model for thinking about engagement. It surveys employees around the world, asking them questions to try to assess the extent to which employees
- Say positive things about the organization they work for and advocate on its behalf,
- Intend to stay at the organization for a long time, and
- Strive to help the organization succeed.
However you measure this factor, engaged workers are almost by definition more loyal and productive.
They tend to be enthusiastic or even passionate about their job, and highly engaged employees often think of their work as a mission, or a calling.
On the other hand, disengaged workers view their job as simply a financial transaction, selling their time to an employer, and most workers who describe themselves as “actively disengaged” are basically unhappy with where they are and pretty much in the market for something else.
The AON Hewitt study found that, across all industries, about 40% of workers consider themselves to be actively disengaged, with even higher proportions found in lower pay positions.
As long-term care leaders like you understand, one cause of worker disengagement is simply the distraction and pain of financial stress in a low-income worker's personal life. Six in ten American workers today don't even have enough in savings to handle a $500 emergency, and this probably includes nearly all your lower wage rate hourly employees.
Hourly workers in the senior living and elder care fields that are living their lives from paycheck to paycheck can easily become distracted or inattentive because of a looming cost or expense that was not anticipated. When the car gets into an accident or when the dentist explains that the twelve-year-old really needs braces – these can be highly stressful events to someone with little or no savings to cushion them.
Here's the good news: Employers in the long-term care field are finding solutions that measurably increase employee engagement and retention.
That's why we've created PayActiv. Its financial wellness platform gives employees immediate access to earned wages without administrative burdens or cash flow changes for their employers.
In a recent study, Employee Net Promoter Score (“eNPS”) measures, a reasonable proxy for employee engagement, soared among employers who had adopted the approach. When companies offered the service to their hourly workers, they found that financial stress was reduced. Employees were less distracted and became more engaged in their jobs. And they tended to stay at their firms longer.
Sound intriguing? You might want to calculate the potential impact of this approach on your business.
Leaders like you – and Mary Haynes – are focused on making the financial wellness and security of their employees central to their mission. As a result, their organizations are performing on an entirely new level – providing exceptional care to the seniors they are entrusted to serve.
Sabina Bhatia leads strategic alliances and partnerships at PayActiv. Click here to find out how other organizations enable their employees to conquer financial stress.