The majority of the South African workforce operates in a permanent state of fight or flight. With 75% of their salaries going to debt repayments, South Africans have little money left to cover monthly living expenses – and very often, none left for emergencies.

Dealing with this level of stress puts the brain in emergency mode – all the time – and it’s not good. The constant release of adrenaline and cortisol (the stress hormone) severely impacts peoples’ well-being: their brains and bodies literally behave as if their survival is at risk.

Money on the mind

When they’re worried about how they’re going to pay school fees, the electricity being cut off, or having an asset repossessed, employees find it difficult to concentrate, remember things, pay attention, or solve problems. And to think, many of them operate heavy machinery, perform complicated tasks, and handle sensitive company information.

In dealing with financial crisis after financial crisis, their “bandwidth taxes” increase, and their mental resources are sapped. They develop debt stress syndrome, which could manifest in obvious ways, such as lack of sleep, loss of appetite, depression, and mood swings.

Or it could have more severe consequences on the brain and body, including:

• Increased risk of heart disease,
• Chronic inflammation in the joints, nerves, and muscles,
• Reduced resilience against mental health problems, and
• Elevated blood pressure and diabetes.

Being unable to manage their debt also impairs employees’ psychological functioning and decision-making. It consumes their thoughts and undermines their ability to think clearly.

To counteract the adrenaline, they might seek hits of dopamine (the feel-good hormone) in unhealthy places, like alcohol, drugs, or food. Or they could indulge in other ways, like payday spending sprees that result in impulse purchases, buyer’s remorse, and another long stretch to payday. To make ends meet, they might take out payday loans or other lines of ‘easy credit', which traps them in the debt cycle through high interest rates, late fees, and the need to take out new loans to cover existing ones. Once they’re in the debt trap, it’s nearly impossible to get out.

Yet, although most people suffer from debt stress syndrome, no one speaks about the emotional and psychological toll of debt – or the powerful mental and physical health benefits of getting out of debt. One way to solve some of the problems is by giving your employees early access to their earned pay – with no cost and minimal effort on your part.

If an employee can access a portion of their earned income – money they’ve technically already worked for – to pay for necessities instead of turning to credit, they reduce the amount of money they spend on servicing debt and can use it for living expenses instead. 

The powerful effects of debt relief on the brain

Research shows that when employees are paid more frequently – biweekly as opposed to monthly, for example – they can cover expenses faster and get ahead in paying off loans. They reported feeling less stressed and anxious, and the employer benefited from increased productivity, fewer mistakes, and higher work quality.

Paying off debt not only feels good; it can also lead to physical healing. With a weight off their minds and shoulders, employees have more time to think. They can focus on the task at hand, they learn faster, and their cognitive functioning improves. Lower debt means less stress, restored self-esteem, financial empowerment, and improved personal relationships.

In a word, they’re happier.

Paying off debt can also help your employees stay financially solvent. Over time, they can develop the discipline to keep their finances in check, and it becomes easier to make wise decisions about saving, spending, and tackling debt.

Move your employees from debt to a savings snowball

Floatpays helps your employees take those all-important first steps in moving from debt to savings. Instead of turning to credit, your employees get on-demand access to a portion of their earned pay whenever they need it to cover unplanned expenses and to manage their cash flow better. In not forcing employees to wait until payday to access what’s due to them, you free up mental bandwidth for them to do their best work. And that should be the goal of any employee wellbeing programme.