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Financial stress affecting 2 in 5 employees

by Charbel Kadib6 minute read
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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.

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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:

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  • Women are more affected than men, with 24 per cent of women found to be in financial stress compared with 14 per cent of men.
  • Brisbane and Adelaide are the two cities worst impacted, with 25 and 22 per cent of workers, respectively, reporting financial stress.
  • Those who earn between $50,000 to $74,999 are the most likely to feel financially stressed.

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.”

Data breakdown

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). 

[Related: New mental health program to be rolled out to brokers]

Financial stress affecting 2 in 5 employees
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Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

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