Financial stress is no longer confined to employees’ personal lives. Increasingly, it is shaping how people perform, engage and plan their future at work.

New findings from the ARAG 2026 Employee Financial Stability Study reveal that nearly 6 in 10 employees (58%) experience moderate to extreme financial stress, and more than half (55%) say that stress is affecting them on the job. For HR leaders already grappling with productivity challenges, burnout concerns and retention pressures, the data points to a growing reality: Financial insecurity has become a workplace issue with significant business consequences.

The findings arrive amid continued concerns about rising living costs, economic uncertainty and household debt. While employers cannot solve every financial challenge employees face, the research suggests organizations can play a meaningful role through benefits, education and resources that help employees build financial confidence and resilience.

“Financial wellness is the ability to make informed financial decisions, adapt to life’s challenges and continue moving toward financial goals with confidence and resilience,” says Denise Keiser, AFC®, Vice President of Empowerment at Balance Financial Wellness. “Ongoing education, coaching and practical resources can help employees build those skills, creating a workforce that is better equipped to navigate financial challenges and remain engaged and productive.”

Financial stress is affecting more than employees’ bank accounts

The drivers of employee financial stress are both widespread and persistent.

The study found that 59% of employees cite rising living costs as a primary source of financial pressure, while 39% point to broader economic uncertainty. Many are also struggling to build savings while managing debt and day-to-day expenses.

For some workers, the challenge is attaining financial stability. As one employee described the experience: “I feel very stressed because my bills keep piling up faster than I can pay them, and I’m always worried something unexpected will make things worse.”

That concern is understandable. Only 30% of employees said they could cover an unexpected $1,000 expense using savings or an emergency fund. Most would need to rely on credit, delay other bills or find alternative ways to cover the cost.

The effects are showing up at work. Among employees whose financial stress impacts their jobs, 61% report feeling mentally drained or distracted, and 58% struggle to concentrate. Others report lower motivation, reduced engagement and a greater likelihood of exploring new job opportunities.

Together, these findings suggest financial stress is more than a personal concern. It can affect focus, productivity, engagement and retention, creating hidden costs for employers.

Navigating the financial wellness journey

The study underscores that financial stress is not a singular experience. Employees face different challenges and those concerns change over time.

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