When Pay Isn’t The Problem: The Hidden Cost Of Financial Stress At Work

The hidden cost of financial stress in the workplace

Despite being employed, many South African workers continue to feel financially strained and it shows at work. Old Mutual's Savings & Investment Monitor 2023 found that 37% of South Africans consider themselves highly financially strained even as optimism has improved from prior years¹. TransUnion South Africa’s Q2 2024 Data Snapshot showed that 83% of new credit issued was for consumption, not asset building – a sign that households are plugging income gaps rather than building resilience². This impacts the workplace: employees struggle to afford transport mid-month, arrive distracted, or even skip shifts. Globally, PwC's 2023 Employee Financial Wellness Survey reported 60% of employees face financial stress, and one-third say it affects their productivity with many losing 3 hours or more per week to personal finance burdens³. Meanwhile, the World Health Organization officially defines burnout, often amplified by financial anxiety, as an "occupational phenomenon," characterised by exhaustion, cynicism, and reduced effectiveness⁴.

In a country where inflation consistently erodes real wages, most employers cannot out-raise the cost of living. The deeper issue is often timing and resilience, not just gross pay. Many households face cash-flow mismatches between payday and recurring expenses as well as not having access to three-month financial buffers. When emergencies arise, they lean on high interest borrowing or skip essential expenses, like commuting, impacting their reliability and productivity. This is supported by global evidence: the Financial Health Network reports that over 40% of U.S. households lack a three-month financial cushion, making them vulnerable to even minor setbacks⁵.

So, what measures make a difference? The evidence and best practice point to a few clear interventions:

• Earned Wage Access (EWA)

EWA aligns wages with expenses, reducing reliance on loan sharks and overdrafts. Best practice requires guardrails: affordability checks, capped access, transparent fees, and coupling access with education.

• Payroll-linked savings pockets

Auto-enrolment, even at small amounts, dramatically boosts employee saving participation and builds resilience over time.

• Just-in-time financial coaching

General workshops don’t stick but short, gamified financial modules linked to EWA access have real behavioural impact.

• Normalising financial help

Employees value employers who visibly support financial wellbeing. PwC found that financially stressed staff are twice as likely to consider these employers³.

The way forward requires implementation of solutions and mechanisms that support the correct behaviour and support employees:

1. Launch a risk-managed EWA pilot (include short learning boosters).
2. Offer an opt-out payroll savings contribution.
3. Add micro-learning modules tied to EWA access.
4. Track outcomes: absenteeism, savings balances, stress, and productivity.

Financial wellbeing in South Africa should no longer be seen as a “perk” but as productivity infrastructure. With liquidity, savings, and light coaching, employers help build a resilient, engaged workforce.

21st Century and PayCurve are currently deploying this model – EWA, payroll savings, and gamified learning – for no cost to employers and with measurable impact.

References

1. Old Mutual, Savings & Investment Monitor 2024 – Key findings – https://www.oldmutual.co.za/news/omsim-2024-key-findings/
2. TransUnion South Africa, Industry Insights Report Q2 2024 – overview – https://www.transunion.co.za/iir/reports/q2-2024
3. PwC, Employee Financial Wellness Survey 2023 – https://www.pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html
4. World Health Organization, Burn-out: an occupational phenomenon (ICD-11) – https://www.who.int/news/item/28-05-2019-burn-out-an-occupational-phenomenon-international-classification-of-diseases
5. Financial Health Network, Exploring Earned Wage Access as a Liquidity Solution –https://finhealthnetwork.org/wp-content/uploads/2023/12/EWA-Users-Report-2023.pdf

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