Financial stress in the workplace: Its effect on healthcare workers

What happens when healthcare workers are too distracted by financial stress to focus on patient care—and could this be the hidden cause of high turnover in your hospital? 

While burnout and long hours are often blamed for healthcare worker shortages, financial stress is the silent issue affecting patient care and staff retention. Employees struggling with their finances are more likely to make mistakes, feel disengaged, and eventually leave. The question is: What can you do to help them—and reduce turnover in the process?

The growing problem of financial stress in healthcare

Financial stress isn’t a new issue, but it’s becoming more prevalent and damaging in the healthcare industry. According to recent surveys, 60% of employees stress about their finances, and healthcare workers are no exception. Many are living paycheck to paycheck, juggling student loan debts, rising living costs, and the uncertainty of future financial stability. And these financial worries don’t stay at home—they follow employees to work.

The impact is real: According to the 2023 PwC financial wellness survey, financially stressed employees are five times more likely to admit that personal finance issues have distracted them at work. In healthcare, where mistakes can be critical, this distraction is dangerous. The emotional toll of constantly worrying about money affects focus, decision-making, and, ultimately, patient care.

Financial stress is hurting more than just employees—It’s hurting your bottom Line

For healthcare organizations, the hidden costs of financial stress are staggering. Take turnover, for example, the average cost of turnover for a single nurse is over $52,000, and hospitals are losing millions every year due to staff leaving. In fact, turnover rates are steadily climbing, with hospitals reporting a 5.9% turnover rate. It’s not just about the money—it’s about the loss of experienced, dedicated professionals whose absence creates gaps in care and increases workloads for remaining staff.

On top of that, financially stressed employees tend to have higher absenteeism rates and lower engagement, directly impacting the quality of patient care. Two in five healthcare workers have considered leaving their jobs within the past year, with financial stress being a major contributing factor.

How financial stress affects healthcare workers’ well-being

Financial stress manifests in several ways, impacting healthcare workers’ mental, physical, and emotional health. From anxiety and depression to sleep disturbances and physical ailments, the stress doesn’t stop when the shift ends. Some common symptoms include:

• Mental and emotional symptoms: Anxiety, worry, depression, and feelings of hopelessness or guilt.
• Physical symptoms: Sleep disturbances, headaches, digestive issues, and fatigue.
• Behavioral symptoms: Avoidance of financial issues, impulse spending, and withdrawal from social activities.

These stressors bleed into the workplace, leading to reduced focus, increased errors, and lower patient satisfaction. When healthcare workers are overwhelmed by their personal finances, they struggle to give their best at work.

The hidden costs of financial stress on patient care

The ripple effects of financial stress don’t stop with employees. They extend to patient care in significant ways:

• Impact on patient safety: Distracted workers are more prone to making mistakes, such as medication errors or lapses in attention, which can jeopardize patient safety.
• Decreased patient satisfaction: When employees are stressed, their ability to empathize with patients diminishes, which can lead to a decline in patient satisfaction scores.
• Delayed treatment and diagnosis: Financial stress can slow response times, affecting the quality and timeliness of care.

The employer's role in alleviating financial stress

So, how can employers step in to alleviate financial stress and support their healthcare workers? Here are a few practical solutions:

1. Salary and wage transparency: Ensuring fair and transparent compensation practices can significantly reduce financial stress. Employees who feel they are paid equitably are less likely to be distracted by financial worries.

2. Flexible payment options: Offering flexible pay options, such as on-demand access to earned wages, can provide relief for employees dealing with unexpected financial challenges.

3. Emergency financial assistance: Setting up an emergency fund or financial assistance program can be a lifeline for employees facing unexpected hardships, like medical bills or car repairs.

4. Offer a financial wellness program: Implementing a comprehensive financial wellness program can provide healthcare workers with personalized coaching, debt management resources, and budgeting tools to better manage their finances and reduce stress, ultimately improving their focus and engagement at work.

Read more on financial wellness programs >

The role of financial literacy in reducing stress

Financial literacy is a powerful tool in combating financial stress. Educating employees about how to manage their money better not only empowers them but also fosters long-term financial stability. Here’s how financial education can help:

• Financial literacy programs: Employers can equip their workers with the knowledge and tools to improve their financial health by offering financial literacy workshops or online resources.
• Long-term benefits: When employees are confident in their ability to manage finances, they experience less stress, are more engaged, and perform better at work.

Mental health support for financially stressed employees

In addition to financial education, mental health support is critical for employees dealing with financial stress. By offering access to mental health resources, employers can help workers navigate both the emotional and practical aspects of financial stress.

•  Employee Assistance Programs (EAPs): These programs can provide confidential support and counseling for employees facing financial issues.
• Peer support groups: Facilitating peer support within the workplace allows employees to share experiences and coping strategies, fostering a sense of community and mutual understanding.

Long-term strategies for healthcare organizations

Financial wellness shouldn’t be a one-time effort. To truly support employees and reduce financial stress, healthcare organizations must adopt long-term strategies:

• Sustainable financial wellness initiatives: Implement ongoing financial wellness programs that offer continuous education, support, and resources.
• Partnerships with financial institutions: Collaborating with banks or financial institutions can provide employees with access to better financial products and services tailored to their needs.

Investing in employee financial wellness is investing in patient care

Financial stress among healthcare workers isn’t just a personal problem—it’s a workplace issue that affects everyone. By addressing it head-on with financial wellness programs, mental health support, and transparent compensation practices, healthcare organizations can reduce turnover, improve patient care, and ultimately create a healthier, more engaged workforce. Investing in your employees’ financial well-being is an investment in the future success of your organization.