Why Financial Stress Is Quietly Costing South African Businesses More Than They Think

Every employer knows the impact of poor mental health on performance. What’s less visible but just as damaging—is the financial stress many employees carry to work each day. It’s not about how much they earn, but how far that money goes, and for many South Africans, it’s simply not going far enough.

Old Mutual’s Savings & Investment Monitor 2023 found that 37% of South Africans feel “highly financially strained,” even though optimism about the future has improved slightly. Meanwhile, 83% of new credit issued in TransUnion’s Q2 2024 Data Snapshot went toward consumption rather than asset creation, a red flag that households are filling short-term income gaps instead of building long-term resilience.

The result? A workforce that’s physically present but financially absent. Employees arrive distracted, take unpaid leave to manage crises, or skip work entirely because they can’t afford transport mid-month. PwC’s 2023 Employee Financial Wellness Survey shows that 60% of workers experience financial stress, and one-third admit it affects their productivity; translating into roughly three lost hours of work per week per employee. The World Health Organization has gone so far as to define burnout, often intensified by financial anxiety, as an “occupational phenomenon.”

In South Africa, the challenge is structural. Inflation continues to chip away at real income, and most employers can’t out-raise the rising cost of living. The issue isn’t only salary, it’s timing and access. Many households run out of cash between pay cycles or lack even a minimal safety net. The Financial Health Network reports that 40% of U.S. households don’t have three months’ worth of savings; locally, the percentage is almost certainly higher. When emergencies hit, employees turn to high-interest loans, which only deepens the cycle.

The Business Case for Financial Wellness

Financial stress doesn’t just affect individuals, it undermines entire organizations. Reduced concentration, absenteeism, and turnover are all measurable outcomes. But evidence shows that certain targeted interventions can reverse the trend.

1. Earned Wage Access (EWA)

EWA programs let employees access a portion of their earned pay before payday, reducing dependence on payday lenders or loan sharks. The best implementations include affordability checks, transparent fees, and responsible caps, ensuring that liquidity support doesn’t lead to overuse.

2. Payroll-Linked Savings

Encouraging small, automatic savings contributions through payroll builds resilience over time. Even minimal, opt-out structures significantly boost participation rates and help employees manage unexpected costs without resorting to debt.

3. Just-in-Time Financial Coaching

Workshops alone rarely change behavior. Bite-sized, gamified learning modules tied to EWA access points or major financial moments have shown stronger engagement and retention.

4. Normalize Financial Support

Employers that actively address financial wellness attract and retain talent. PwC’s research found that financially stressed workers are twice as likely to value and stay with companies that demonstrate care for their financial wellbeing.

What Implementation Looks Like

Forward-thinking employers are starting to view financial wellness as core infrastructure, not an optional benefit. The roadmap is clear:

• Pilot a risk-managed EWA program with short, interactive financial lessons.

• Introduce payroll-linked savings with an opt-out option.

• Offer micro-learning content focused on budgeting and debt management.

• Track measurable outcomes such as absenteeism, savings rates, and stress levels.

Financial wellness initiatives shouldn’t be viewed as costs, they’re productivity investments. A financially stable workforce is more reliable, engaged, and innovative.

21st Century and PayCurve are at the forefront of this transformation. Together, they’re rolling out integrated models that combine EWA, payroll savings, and gamified education at no cost to employers. The goal: build financially resilient workforces that perform better, stay longer, and live healthier financial lives.