A young software engineer in Bengaluru earns Rs 12 lakhs annually—double what her parents made at the same age. Yet she lies awake at night worrying about money. Her story isn’t unique. Despite rising salaries and economic growth, financial anxiety continues to plague the modern workforce, creating a productivity crisis that forward-thinking employers can no longer ignore.
The misconception that higher salaries automatically translate to financial wellness has led many organisations astray. Whilst early salary increases might provide temporary relief, they rarely address the underlying issues: lack of financial literacy, poor investment choices, and inadequate retirement planning. True financial wellness requires education, not just compensation.
Nearly a decade ago, HRKatha’s coverage of the 2016 Willis Towers Watson study revealed that over half of Indian employees were worried about their financial future, with these concerns directly affecting workplace productivity. The passage of time has done little to ease these anxieties. The 2024 Global Benefits Attitudes Survey by Willis Towers Watson, which interviewed 45,000 employees across 29 countries, reveals a troubling continuity: financial stress continues to erode both employee wellbeing and workplace performance.
A global crisis of confidence
The statistics paint a stark picture across all regions. In Asia-Pacific, 28 per cent of employees report being financially worse off than a year ago, whilst 31 per cent say financial concerns negatively impact their wellbeing. The figures prove even more sobering elsewhere—33 per cent of North American employees report deteriorating financial conditions, with 37 per cent acknowledging that money worries affect their wellbeing.
Perhaps most alarming is the retirement-readiness crisis. A staggering 75 per cent of Asia-Pacific employees admit they aren’t saving enough for retirement, with only 54 per cent feeling on track for their post-work years. The problem is global: 82 per cent of Latin American employees and 78 per cent of North American workers share similar retirement anxieties.
This persistent financial unease occurs against a backdrop of economic uncertainty. Inflation has reached levels unseen in recent years, interest rates have climbed globally, and the cost of housing and childcare has soared. For many employees, particularly younger ones burdened with student loans, financial stability feels increasingly elusive—regardless of their salary level.
The retirement picture appears particularly bleak, with confidence declining since 2022. Employees increasingly expect to work well into their 70s—not by choice, but by necessity. In developed economies, the proportion of workers aged 50 or older expecting to work to age 70 or beyond has grown substantially between 2019 and 2024: from 16 per cent to 31 per cent in Denmark, 11 per cent to 33 per cent in Ireland, 20 per cent to 37 per cent in Japan, and 30 per cent to 46 per cent in the US.
Nobias addresses India’s pressing financial literacy gap—where 73 per cent of Indians remain financially illiterate—by empowering employees to understand their goals, risk profile, and asset allocation, enabling them to make confident financial decisions.
Dr. Tania Ahuja, Founder, Nobias
The disconnect between needs and priorities
The consequences extend well beyond personal balance sheets. When employees are preoccupied with financial concerns, their focus at work inevitably suffers. Yet here lies a troubling disconnect—whilst 59 per cent of employees globally identify financial wellbeing as their top priority, only 22 per cent of employers share this focus.
This misalignment reveals a fundamental gap in understanding. Employers continue to prioritise emotional wellbeing (66 per cent focus) and physical wellbeing (52 per cent focus), even though employees’ needs on emotional and physical wellbeing is just 41 per cent and 40 per cent, respectively. Meanwhile employees desperately seek help with the financial pressures that often drive emotional and physical stress in the first place. The gap between employee needs and employer priorities in financial wellbeing stands at a striking 37 percentage points—the largest misalignment across all wellbeing categories.
The human cost of this disconnect becomes evident in workplace behaviour. Employees with worse financial wellbeing show higher levels of mental distress, make poorer lifestyle choices, and experience worse health outcomes. At work, they are less engaged and more likely to leave their jobs—creating a vicious cycle where financial stress undermines both personal wellbeing and professional stability.
Interestingly, whilst mental health concerns have shown some improvement globally, particularly among younger workers, financial anxiety remains stubbornly persistent. This suggests that even as companies invest heavily in emotional and mental health support, they may be missing a crucial underlying driver of employee distress.
Beyond salary increases: True financial wellness
Recognising these realities, a growing number of Indian companies are expanding their employee wellness offerings to include comprehensive financial education and support. Leading organisations such as Deloitte India, Renew, P&G India, and Dell Technologies have moved beyond the simplistic assumption that higher salaries solve financial problems. Instead, they’re providing financial literacy sessions, investment guidance, and access to trusted financial advisors.
P&G India has designed a comprehensive benefits portfolio focused on long-term wealth creation by enhancing employees’ financial wellbeing. The programme includes support such as reimbursable financial advisory services and additional fixed allowances for meeting personal and family needs. Dell Technologies builds awareness among its multi-generational workforce on financial stability and market understanding. Deloitte India strengthens this effort by conducting regular sessions with external experts on financial wellness and money management.
The most recent Deloitte session was led by Dr. Tania Ahuja, founder, Nobias, a women-owned, technology-driven financial wellness company and SEBI-registered investment advisor. Drawing on her experience as a Ph.D. scholar from NYU Stern and board member, she shared practical insights on financial planning and smart investing. Dr. Ahuja highlighted how Nobias addresses India’s pressing financial literacy gap—where 73 per cent of Indians remain financially illiterate—by empowering employees to understand their goals, risk profile, and asset allocation, enabling them to make confident financial decisions.
These initiatives go beyond traditional employee-assistance programmes. Companies are offering comprehensive courses in personal finance, explaining investment vehicles from mutual funds to government schemes, and helping employees understand derivatives and equity markets. The focus is particularly sharp given India’s predominantly young workforce, eager to maximise returns on their investments but often lacking the knowledge to do so safely.
Some employers have begun offering direct support with student loan repayments—a targeted intervention that addresses one of the most significant sources of millennial financial stress. Whilst such programmes require substantial investment, they represent recognition that employee financial health directly impacts business performance.
The strategic advantage of financial wellness
The business case for financial-wellness programmes has become increasingly compelling. Since 2017, the importance of benefits in job selection has increased by 50 per cent, according to the Willis Towers Watson survey. Employees are not only joining organisations based on comprehensive benefits but increasingly staying for the financial security these packages provide.
This trend creates opportunities for strategic differentiation. Companies that invest meaningfully in employee financial wellness can gain significant competitive advantages in talent acquisition and retention. The investment required—training programmes, financial advisory services, educational workshops—is modest compared to the costs of high turnover and reduced productivity.
Moreover, financial wellness initiatives create positive feedback loops. Employees who feel financially secure are more likely to take calculated risks, pursue innovation, and commit long-term to their employers. This stability benefits both individual career development and organisational performance.
The most effective programmes appear to combine education with practical support. Teaching employees about investment options is valuable, but providing access to unbiased financial guidance ensures they can act on that knowledge safely. Similarly, offering student-loan assistance alongside retirement planning addresses both immediate and long-term financial pressures.
Implementation challenges and cultural considerations
However, successful financial-wellness programmes require more than good intentions. They demand cross-functional collaboration between HR, finance, and external partners, plus genuine commitment from senior leadership. The most effective initiatives are those integrated into broader employee-development strategies rather than treated as standalone offerings.
Cultural considerations matter significantly in the Indian context. Financial planning approaches that work in Western markets may require adaptation for local investment preferences, family structures, and economic conditions. Companies that recognise these nuances are more likely to create programmes that genuinely resonate with their workforce.
The measurement of success presents another challenge. Whilst employee satisfaction surveys can capture initial reactions, the true test of financial-wellness programmes lies in long-term outcomes: reduced turnover, improved productivity, and enhanced employee engagement during economic uncertainty.
From cost to strategic investment
The evidence suggests that financial-wellness programmes represent strategic investment rather than generous gestures. As economic pressures intensify and talent becomes scarcer, companies that help employees achieve genuine financial stability—not just higher salaries—will likely enjoy significant competitive advantages.
For HR leaders, the imperative is clear: financial wellness can no longer be treated as a peripheral benefit. It requires the same strategic attention as talent acquisition and performance management. The most successful programmes will be those that provide comprehensive education, unbiased guidance, and practical support tailored to diverse employee needs.
For employees, particularly those early in their careers, the message is equally urgent: financial literacy represents both personal security and professional advantage. In an era of economic uncertainty, those who understand money management, investment principles, and retirement planning will be better positioned to weather financial storms and seize opportunities.
The 2024 survey data makes clear that financial anxiety isn’t disappearing on its own. If anything, global economic uncertainty has intensified these concerns, making workplace financial-wellness programmes more relevant than ever. Companies such as P&G India, Deloitte India, and others partnering with expert organisations such as Nobias recognise that employee financial health directly impacts business performance—a connection that forward-thinking organisations ignore at their peril.
The question is no longer whether companies should invest in employee financial wellness, but how quickly they can implement meaningful programmes. In an era where talent retention has become a strategic priority, helping employees achieve true financial security—through education and guidance rather than just salary increases—may prove one of the most effective investments organisations can make.
Source – https://www.hrkatha.com/employee-financial-wellness-hub/the-hidden-cost-of-financial-anxiety/