Reducing Employee Turnover: Financial Wellness Tips
How to Address Employee Turnover: Tips from a Financial Therapist
Did you know that over 44 million Americans quit their jobs last year, with a staggering 3.4 million resigning in January 2024 alone? As a financial therapist, I’ve witnessed the ripple effects of such massive turnover. I’m here to tell you that team bonding exercises, pizza lunches, and employee-of-the-month shoutouts aren’t cutting it. If your company feels like a revolving door, it’s time to reevaluate your approach to employee retention.
In my work, I’ve seen firsthand how intersected financial and emotional well-being are, and this carries into job satisfaction. High employee turnover is more than just a statistic; it’s a loud and clear signal that something within your organization isn’t resonating with your team. And if you’re involved in hiring, management, or overseeing employee culture and well-being, you’re in the right place. Here are some practical strategies to help you keep the employees you want to keep.
The Impact of the Great Resignation and the Great Reshuffle
A few years ago, the “Great Resignation” was making headlines everywhere. Workers began prioritizing what truly mattered to them—mental health, physical well-being, or quality time with loved ones—and weren’t willing to sacrifice these for a job that didn’t meet their needs. This shift in priorities led to a wave of resignations as employees sought better work-life balance and more fulfilling careers.
While the initial surge of the Great Resignation has tapered off, we’re now in the midst of what’s being called the “Great Reshuffle.” Employees may not be as quick to quit, but they’re certainly keeping an eye out for better opportunities and aren’t willing to stick around as long when a job doesn’t seem like a fit.
When 3.4 million people leave their jobs in just one month, it clearly shows that traditional employee engagement methods are no longer effective. As a manager or HR professional, it’s crucial to understand what’s driving this exodus and how you can address it.
Emotional Drivers Behind Employee Turnover
While it’s easy to assume that people leave jobs primarily for financial reasons, that’s not the whole story. Yes, money plays a role, but a huge emotional component is also tied to work. This emotional toll can manifest in two main ways: burnout and boredom.
Burnout is a specific type of exhaustion that stems from working too much, dealing with difficult situations at work, or feeling like you can never catch your breath. It’s the feeling of jumping from one project to another without a moment to pause or receive recognition for your hard work. Burnout affects both physical and emotional well-being, leading to difficulty concentrating, sleep problems, body aches, and a general sense of negativity or cynicism.
On the other end of the spectrum is boredom—the feeling of being under-challenged and under-stimulated at work. When employees don’t get new challenges, they can feel like their skills and talents are going to waste. This can lead to feelings of despondency and a lack of engagement, which can be just as detrimental as burnout.
The Role of Financial Wellness in Employee Satisfaction
Now, let’s talk about money. While it’s not the only factor, financial compensation is undoubtedly key to employee satisfaction. If you think your organization pays employees well enough, consider this: a recent study found that only 14% of employees felt adequately compensated. That leaves a significant majority feeling underpaid—and potentially undervalued.
The financial aspect is closely tied to the emotional one. When employees feel they aren’t compensated fairly for their work, it can lead to burnout (“I’m working too hard for too little”) or boredom (“This job is tedious; I could get paid more elsewhere”). Ensuring fair compensation is critical to reducing turnover and maintaining a motivated workforce.
As a financial therapist, I focus on the intersection of money and emotional well-being. Financial wellness in the workplace goes beyond offering employees access to budgeting workshops or 401(k) enrollment sessions. It’s about making sure employees feel supported in their financial lives, which in turn contributes to their overall well-being.
5 Ways to Implement Financial Wellness at Work
One of the most common responses I hear when facilitating corporate financial wellness workshops is, “Oh, we already did that.” Usually, this means the company has hosted a session on saving money on groceries or enrolling in a retirement plan. While these are important topics, they don’t go deep enough. Research shows that about 80% of our financial decisions are driven by how we feel, so addressing the emotional aspects of financial wellness is essential.
If you want to help your employees feel better overall and reduce turnover, here are some steps you can take to implement financial wellness employee benefits in the workplace. I’d also categorize these methods as creative compensation or “complimentary compensation,” offering employees more holistic support.
1. Create a Clear Benefits Statement
One of the simplest yet most effective things you can do is provide employees with a crystal-clear benefits document. This document should outline all the financial wellness benefits employees receive, along with the associated dollar amounts. Include everything—from salary and retirement contributions to childcare support, tuition reimbursement, and legal benefits. Make sure it’s easy to read and understand so employees can see the total value of their compensation package.
2. Ensure Access to Benefits
Making it easy for employees to access benefits is another way to implement financial wellness at work. If certain benefits require additional steps (e.g., accessing a financial advisor or applying for a transportation subsidy), ensure employees know how to take advantage of them. It’s not enough to list the benefits; you need to ensure employees can easily access and utilize them.
3. Be Transparent About Promotions and Raises
Another way to retain employees is by being transparent about how they can achieve promotions, raises, or bonuses. Clearly outline the promotion structure or the metrics they need to meet, and let them know you value their contributions and want to see them succeed within the company.
4. Cultivate a Culture of Financial Conversations
In one of the workshops I led, I taught HR managers how to normalize financial conversations within their teams. This included incorporating financial check-ins during annual reviews and offering professional development workshops that address the emotional aspects of financial stress and anxiety. By creating a culture of financial conversations, you demonstrate that you care about your employees' financial well-being and can help reduce employee turnover by offering creative compensation solutions that address their needs.
5. Rethink Teaching Traditional Budgeting
In another workshop on financial wellness that I taught, I challenged the traditional approach to budgeting by demonstrating its pitfalls and teaching employees how to create sustainable, non-restrictive, and shame-free spending plans. This approach provided tangible financial tools and showed employees that their company genuinely cares about their financial well-being through innovative financial wellness employee benefits.
Investing in Your Employees’ Financial and Emotional Well-being
There’s a significant cost—both in time and energy—associated with employee turnover. Posting job openings, interviewing candidates, and training new hires are time-consuming and often stressful. You can reduce turnover and build a more loyal and motivated workforce by engaging your current employees, using creative compensation methods, and ensuring they feel supported, valued, and financially secure.
Financial wellness at work isn’t just about teaching employees how to budget or save for retirement. It’s about creating an environment where they feel safe enough to make meaningful financial decisions supporting their well-being. When employees feel that their company is invested in their financial health, they’re more likely to stay—and thrive—in their roles.
So, if you’re ready to make a real impact to reduce employee turnover, start by taking a holistic approach to financial wellness. Your employees—and your bottom line—will thank you.