Debt Stress is a Drain on Job Performance. Here’s What Employers Can Do About It

UpdatedApr 25, 2025
- Workers who struggle with debt stress face challenges that often spill over into the workplace.
- Financial wellness benefits designed to address these challenges are popular among employees, but largely unavailable.
- Employers can address this growing problem by offering financial education and support to help improve employees’ productivity, retention, recruitment, and overall health and happiness.
If you're in a lot of debt, you may spend time worrying about the money you owe—even if you're taking part in a debt relief program.
Unfortunately, your debt stress probably doesn't disappear just because you happen to be at work. Since many people who need debt relief can't just put away their financial concerns at the door of the office, it's not surprising that money woes often interfere with job performance.
What may come as a surprise, though, is the scope of the issue. Just how many employees owe money and suffer from debt stress? Here's what you need to know.
How many workers experience debt stress?
There's no question that many people in the U.S. worry about money. Around 30% of Americans have said that debt is a cause of financial stress, according to a survey by Discover. This includes credit card debt, medical debt, personal loan debt, and home loan debt.
Research conducted by the Financial Health Network and sponsored by Freedom Debt Relief also found that 63% of full-time workers at medium and large companies said they had at least one of these types of unsecured debt. In addition:
47% of respondents said they were unable to pay their bills at least one time in the past year.
32% said that they or someone in their household had trouble paying medical bills in the last year. Among those respondents, half the respondents said they had to reduce spending on basic needs such as food and clothing to pay medical bills.
Nearly half (47%) of respondents with $25,000 or more in unsecured debt said they worry about whether they can afford groceries.
34% of employees with over $25,000 in debt and 24% of those with less than $10,000 in debt reported that someone in their household stopped taking a medication or took less than prescribed because they couldn’t afford it.
32% of all respondents said they had trouble paying their rent or mortgage.
As these numbers show, having a lot of debt can interfere with your life in many ways.
How does debt stress affect work performance?
Since debt affects so many aspects of your life, it's not surprising that it can affect your job as well. The data from the Financial Health Network shows there are two big ways that debt can impact your work performance:
65% of survey respondents said that their physical health was impacted by their debt stress. If workers are getting sick more often because of money worries, they are more likely to need to take time off—which is why 40% of people surveyed said debt-related issues had caused them to miss at least a day of work in the past 12 months.
Around 50% of respondents said they averaged around an hour per week of work time spent dealing with debt-related issues. That adds up to the equivalent of a full week of lost productivity during the course of one year.
It's in the best interests of businesses to try to help employees better manage their debt stress to avoid this drain on job performance.
What can employers do to help ensure debt stress doesn't interfere with work performance?
Companies need to understand the impact of debt stress and be creative in developing a comprehensive approach to helping their employees get on firmer financial footing.
One way they can do that is by providing debt-related financial wellness resources through employee benefits programs. Financial Health Network asked respondents about their access to 13 types of debt-related financial wellness benefits, including:
General-purpose financial education and tools
Personalized financial advice
Employer-funded financial assistance
Payroll advances
Debt consolidation loans
Other debt relief products
Overall, the study found access to these benefits is extremely limited. To make matters worse, employees who would get the most out of financial wellness benefits, such as those with higher total debt and debt-related stress, as well as those with lower incomes, have the least access to credit card debt relief or other similar programs.
Workers Have Limited Access to Financial Wellness Benefits
The table below shows just how few workers currently get access to financial wellness benefits that could help them get out of debt and shore up their finances.
Debt-Related Benefit | Respondents with Access |
---|---|
Free access to financial planning app/website (e.g., budgeting and savings tools and calculators) | 38% |
Free financial education resources | 37% |
Free personalized coaching sessions with a financial professional | 30% |
Free credit counseling sessions to help manage debt | 29% |
Employer contributions to an emergency savings account | 28% |
Access to an emergency savings account | 28% |
Emergency grant fund to help with an unforeseen catastrophic event or illness | 27% |
Access to low-cost personal loans that can be paid back via payroll | 26% |
Employer contributions toward student loan repayment | 26% |
Free or low-cost access to accrued, earned wages in advance of payday | 24% |
Access to mortgage loan support | 23% |
Access to student loan solutions that offer evaluation tools and options for refinancing | 22% |
Access to a debt consolidation loan or other form of debt relief | 20% |
Source: Helping Employees Manage Debt Designing Debt-Related Benefits To Match Employee Needs and Preferences, Financial Health Network, 2022
If employers want debt stress to be less of a drain on job performance, these numbers need to change.
Employers who offer financial tools and debt relief support could help improve job performance
If more employers offered debt relief programs and other money management tools and education, this could significantly improve worker productivity and retention.
For example, a majority of respondents believe debt-related financial wellness benefits belong in the workplace. Sixty-two percent of respondents reported they would be more likely to stay at a job that offered useful debt-related benefits. At least 40% of respondents said that if offered, they would be somewhat or very likely to use debt-related benefits.
Employers can meet the needs of workers, and reduce their stress, by creating programs to teach them proactive approaches to debt payoff. This could include access to credit counseling or affordable loan options that could be repaid through payroll deductions.
The data also suggests that employers designing debt-related financial wellness benefits should emphasize confidentiality practices, ease of access, and availability of personalized help to encourage employees to take advantage of these services. Companies should also clearly explain the benefits they offer so workers know what services they can access.
By tailoring debt-related benefits to employee needs and preferences, businesses could leverage these underutilized tools to create meaningful change for the workers who need it most.
A look into the world of debt relief seekers
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during November 2024. This data highlights the wide range of individuals turning to debt relief.
Age distribution of debt relief seekers
Debt affects people of all ages, but some age groups are more likely to seek help than others. In November 2024, the average age of people seeking debt relief was 49. The data showed that 17% were over 65, and 18% were between 26-35. Financial hardships can affect anyone, no matter their age, and you can never be too young or too old to seek help.
Student loan debt – average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average student debt for those with a balance was $46,980. The percentage of families with student debt was 22%. (Note: It used 2022 data).
Student loan debt among those seeking debt relief is prevalent. In November 2024, 27% of the debt relief seekers had student debt. The average student debt balance (for those with student debt) was $48,703.
Here is a quick look at the top five states by average student debt balance.
State | Percent with student loans | Average Balance for those with student loans | Average monthly payment |
---|---|---|---|
District of Columbia | 34 | $71,987 | $203 |
Georgia | 29 | $59,907 | $183 |
Mississippi | 28 | $55,347 | $145 |
Alaska | 22 | $54,555 | $104 |
Maryland | 31 | $54,495 | $142 |
The statistics are based on all debt relief seekers with a student loan balance over $0.
Student debt is an important part of many households' financial picture. When you examine your finances, consider your total debt and your monthly payments.
Manage Your Finances Better
Understanding your debt situation is crucial. It could be high credit use, many tradelines, or a low FICO score. The right debt relief can help you manage your money. Begin your journey to financial stability by taking the first step.
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How does financial stress affect work performance?
An estimated 65% of workers said debt stress affects physical health, and 50% said they spend around an hour of work time each week dealing with debt-related issues. This data shows that indebted workers are more likely to miss work due to health issues, and can sometimes be less productive when they are at work.
What are some signs financial stress is affecting a person's well-being?
Three signs that debt stress or other money worries are affecting your well-being include:
Worrying about debt keeps you up at night
Money arguments that affect your relationship with loved ones
An inability to concentrate on work or other activities because of financial concerns
If you notice these signs, you should explore opportunities for debt relief.
How can you rebuild your life after financial problems?
If you have financial problems, you should be proactive in taking control of them. Make a plan to get out of debt and save money. Create a budget to live within your means and make responsible moves, such as paying your bills on time. Over time, your past money mistakes will have less of an impact as you build a safety net and improve your credit record.