Approximately 40 per cent of Australian employees are experiencing financial stress, costing businesses an estimated $31.1 billion, according to new research from AMP.
AMP’s Financial Wellness report has revealed that two in five Australians are experiencing financial stress during their careers, with nearly half feeling financially stressed for an average of six and a half years or more.
According to the report, there are currently 2.44 million Australians suffering from financial stress, costing Australian businesses an estimated $31.1 billion per year in lost revenue, with employees troubled by their financial circumstances taking an extra 2.4 sick days per year and spending almost an hour per week dealing with money problems at work.
When assessing which segments of the labour market are most affected by financial stress, the AMP research found:
AMP’s director of workplace super, Ilaine Anderson, also observed that employees are most affected by financial stress in the months of January and February.
“As the holiday season comes to an end, and credit card bills start to roll in, many Australians will be starting the new year under significant financial pressure,” she said.
“While many people think money worries are a personal issue, our research shows being financially stressed spills into your working life, increasing absenteeism and impacting productivity.”
Ms Anderson noted the importance of goal-setting in easing the burden of financial stress.
“The research shows if people have well-defined goals and a plan in place to achieve them, they have greater peace of mind. Goals help lift people above the day-to-day expense cycle, allowing a more ‘in-control’, longer-term view,” she continued.
“People don’t wake up and think ‘I’m going to get a home loan’ – it starts with the desire, or a goal, to buy a house. Connecting finances with goals helps us engage with our finances, and then having a plan to achieve these goals can significantly ease stress.”
The AMP director added that employers can play an important role in promoting financial wellness in the workplace.
“The research found flexible working hours and the ability to work from home improved employee performance, engagement and financial wellness. Reducing the stigma around financial stress is also important, as many of those surveyed cited embarrassment and guilt as a major reason for not tackling their financial woes,” Ms Anderson said.
“We need to make sure talking money isn’t seen as taboo and implement financial literacy campaigns within our businesses to help employees achieve their financial goals.”
Further, of those in financial stress, the report found that 5 per cent are severely financially stressed, 14 per cent are moderately financially stressed, 35 per cent are mildly financially stressed and 46 per cent are financially secure.
Of Australia’s five largest capital cities, Brisbane is the most financially stressed (25 per cent), followed by Adelaide (22 per cent), Melbourne (20 per cent), Perth (17 per cent) and Sydney (16 per cent).
According to the research, financial stress is most prevalent among employees in the transport, postal and warehousing sector (25 per cent), followed by both administrative services and hospitality (24 per cent), financial and insurance workers (21 per cent) and both retail and healthcare and social assistance workers (20 per cent).
Moreover, the demographics showing the highest incidence of financial stress include single parents (35 per cent), those living in shared accommodation (31 per cent), people living in regional Queensland (28 per cent) and women (24 per cent).
The study also found that those earning between $50,000–$74,999 reported the highest level of financial stress (26 per cent), followed by $25,000–$49,999 (24 per cent), $75,000–$99,999 (16 per cent), $100,000–$149,99 (12 per cent) and $150,000 and above (11 per cent).
Charbel Kadib is the news editor on The Adviser and Mortgage Business.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.
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