Think about the last time you had a very stressful day. Maybe it was due to an imminent deadline, a missed appointment or some troubling news. How did it affect your mental health? It probably didn’t help, right?
We’ve all experienced difficulty at least once in the last few years. In fact, World Health Organization found the COVID-19 pandemic caused a 25% global spike in depression and anxiety.
Now imagine you felt that anxiety every single day. For the 61% of Americans living paycheck to paycheck (as reported by LendingClub), overwhelming stress is just one payroll error away.
That one error could be catastrophic to the financial wellness of these employees and force them to ask agonizing questions like:
- “How do I decide which bills to pay?”
- “How can I afford my mortgage this month?”
- “How am I supposed to get to work without money for gas?”
- “Will I be OK if I go a week without my prescription?”
- “How will I afford to feed my kids?”
No employer wants to put their people in this position. After all, can a business really prove it cares about its employees if they’re constantly concerned about if payroll will run accurately and on time? And can an employee help a business succeed if they’re stressed about paying their rent or mortgage?
More businesses are fostering a supportive culture for mental health, and it’s something every business should aspire to. Because payroll errors risk derailing wellness programs, these initiatives should be built on a solid foundation: a perfect payroll.
Who would feel confident in their organization if they can’t trust it to pay them accurately? And what options does an employer have to ensure payroll mistakes don’t cost them their workforce?
Let’s first dive deeper into the stressful toll of payroll errors. Afterward, we’ll examine what businesses should do today to avoid payroll pain and deliver the peace of mind employees need.
How does financial trouble fuel stress?
Money is undeniably important to our quality of life. Nearly every plan we make and obligation we meet depends on our ability to afford it. It’s not that it’s what we live for, but it does influence our ability to live well.
If money is so closely tied to our quality of life, it’s not a stretch to envision how it influences stress. What you may not have considered is how the inverse is also true; 72% of respondents said their mental health problems made their financial situation worse, per a survey conducted by the Money and Mental Health Policy Institute.
Stress and financial concerns operate in a cycle, and payroll errors add fuel to the fire of both. If this wasn’t enough, an overwhelming number of employees are already in a mentally precarious place at work. A study from the American Institute of Stress found a staggering 94% of employees endure stress at work, and 63% report they’re ready to quit to avoid work-related stress. For a majority of workers, it’ll only take a small nudge to push them toward resignation.
And payroll errors are anything but small. A problem with an employee’s paycheck multiplies the worst parts of the money-stress equation. On top of this, an outdated payroll process makes employees feel powerless over the situation.
These issues don’t just force a worker to question how they’ll juggle their bills; it compels them to ask why they should trust their employer at all.
How does financial stress harm relationships?
Stress is like venom: It moves quickly and before too long, its negative effects cascade into every aspect of our lives. Mental health is bigger than those who immediately feel it. Anxiety and other mental health concerns potentially impact relationships with our:
- family
- friends
- romantic partners
- co-workers and peers
This isn’t just speculative, either. In a survey conducted by OnePoll and commissioned by Beyond Finance, a consumer debt adviser, 2 in 3 Americans said they’ve passed on social gatherings because they’re embarrassed by their financial situation. In other words, discomfort around money keeps many of us from interacting with each other.
Financial stress hits especially close at home. According to a study from Northwestern Mutual, a financial consultant, 1 in 5 Americans have monthly arguments about money with their significant other. Some of these disagreements may revolve around:
- savings
- retirement
- child care
- future plans
- and more
While a few conversations are unavoidable, imagine how many relationships are negatively affected by something as preventable as a payroll error. How many sleepless nights and heart-breaking decisions are rooted in an issue that never should’ve happened?
When employees have the chance to fix payroll issues before they’re problems, employees — and their loved ones — enjoy peace of mind.
How does employee-driven payroll ease financial stress?
Our ability to plan and anticipate challenges hinges on the information we have. For example, you can’t safely book a cross-country flight to see family or coordinate a child’s birthday bash without knowing if you can afford it.
But even when an employee estimates their payroll, they don’t really know how much money they have until it hits their account. With outdated tech, there’s no way for them to truly verify their hours, benefits, expenses, taxes and more until after it spurs a wave of undue stress. Whatever the issue is, it’s the employee who suffers most.
Through employee-driven payroll, businesses have the power to address their workforce’s mental and financial health. The tech works by guiding employees to resolve issues before payroll runs — right in the same app they use to manage all their HR data.
While employees reap the benefits of greater confidence in their pay and trust in their organization, their employers enjoy:
- improved accuracy
- higher efficiency
- lower liability
- greater engagement
- less costly payroll corrections
After all, certainty is priceless.
Ready to enhance your employees’ well-being and empower them to build a better future? Explore Beti®, Paycom’s employee-driven payroll experience, to learn how it guides workers to find and fix errors before payroll runs — right in the Paycom app!
DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.
