This is impacting individuals in the workplace and business productivity, according to new research by AMP
for its 2016 Financial Wellness report.
The study found Australians’ confidence in their finances continued to drop in the past two years, from 54% of people confident in 2014 compared to 48% in 2016.
This lower confidence came despite an increase in disposable cash held by Australians, rising 6.3% over the past two years.
, Director Corporate Superannuation, AMP, said financial stress is a common occurrence in the Australian workforce, with more than 2.8 million employees under financial stress in 2016.
“People who experience financial stress are more likely to be unable to work due to stress-related sickness, which can affect their health and morale in addition to lowering workplace productivity – at an estimated cost of $47 billion in lost annual revenue for employers,” said Doyle.
“It’s important we find ways to address levels of financial stress in the workplace.
“We know the real difference financial goals can make in preventing and overcoming financial stress. Australians who have clearly defined goals are much more likely to be financially secure.”
The findings also showed financially stressed employees lose on average 6.9 hours of productive work per week and, on average, are absent 1.3 hours per week due to stress-related sickness.
It also found that financial stress is highest among workers in accommodation and food services (35% of people are financially stressed).
Employees are also at high risk of financial stress in healthcare and social assistance (32%), and administrative services (31%).
“In addition to the personal impact of financial stress, we’re also seeing a significant impact on business owners and operators through lost productivity and employee absenteeism, which is particularly high in the hospitality and healthcare industries,” added Doyle.
Even though 80% cent of the workforce already have financial goals in-mind, only 18% of these people have a defined plan to achieve their goals.
“Employers can help their employees to bring clarity and shape to their financial goals by supporting financial wellness in the workplace,” said Doyle.
“If employees have well-defined goals and a plan to achieve them, they are less likely to experience financial stress, helping them to be more productive.”
Further findings include:
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- Australians say common triggers for their financial stress are bad debt (50% of stressed workers), the need to save for retirement (35%) and providing for their family (34%). Missing bills and making mortgage repayments also contribute to higher levels of financial stress for 32 and 22 per cent of stressed employees, respectively.
- Brisbane is the most financially stressed city, with 30 per cent of workers in this region experiencing financial stress. This is followed by Adelaide (25%), Perth (23%), Sydney (20%) and Melbourne (19%). Darwin and Hobart are the least financially stressed at 18 and 16%, respectively.
- The number of employees experiencing financial stress in the mining industry has significantly increased over the past two years, almost tripling from 9% in 2014 to 26% in 2016.
- Females are more likely to experience financial stress with 30% stating this is the case, compared to 19% of males.
More than one in four Australian workers say they have low confidence in their financial position and find it difficult to make ends meet.