The financial stress piling up on employees due to an increase in home foreclosures and defaults on credit cards is having an impact on the workplace, potentially draining productivity and increasing emotional stress on the job.
Major employee-assistance counselors serving Fortune 500 companies are reporting a surge in calls from employees worried about mortgages and finances. Ceridian, a Minneapolis-based provider of employee counseling services, typically gets several hundred calls a month from employees seeking financial counseling. From June to July, it saw a 50% increase in calls for financial advice.
And ComPsych, a Chicago-based employee assistance provider, reports a similar surge in finance-related calls.
"Our calls in general for mortgage-related issues are up over three times compared to last year," says Richard Chaifetz, CEO of ComPsych. "(Employees) become preoccupied with financial issues at work. You see absenteeism, lack of performance and turnover as people look for jobs that may pay more."
Financial worries can manifest themselves in the workplace as employees moonlight to pick up extra money, or can cause anxiety, depression, absenteeism and productivity problems that affect the bottom line, says Jonathan Hefner, manager of legal and financial counseling services for Ceridian.
"There is a connection between emotions and finances," Hefner says. "Employees are calling about the mortgage crisis and financial squeeze. They're very anxious. We're hearing a lot more concern about foreclosure. It can have a real significant (impact) at work."
The number of foreclosure filings reported in July, according to an August report from RealtyTrac, jumped 93% from July of 2006 and rose 9% from June, the latest sign that homeowners are having trouble making payments and finding buyers during the national housing slump. There were 179,599 foreclosure filings reported during July, up from 92,845 during the same period a year earlier.
Nearly three out of five employees say they're worse off financially this year, according to an August survey by ComPsych. Just 16% said they are better off, with more savings and less debt.
Money woes can take a severe toll on employees. When asked what kept them awake at night, 38% of employees said they are concerned about being able to pay for basic necessities in retirement, according to a survey by The Principal Financial Group. Nearly half are anxious about enjoying the same quality of life they now have.
"Financial stress is probably the No. 1 stress that gets people to fail," says Arkadi Kuhlmann, CEO of online bank ING Direct. "People are preoccupied and not being as productive."