The financial stress pass-through

Financial stress faced by employees is found to lead to lower productivity outcomes, with experts signalling the importance of immediate action by finance, risk, and people leaders to avoid business drains.

According to Gallagher’s 2026 Workforce Trends Report, while two in three employees faced financial stress, one in three adopted a side hustle to manage these pressures, and one in four reported feeling burnt out.

At Gallagher’s 2026 TransTasman Trends Tour in Sydney, the firm’s corporate benefits national manager, James Callender, told HR Leader: “The workplace culture is changing, and there [are] lots of different generations in the workplace now. [As] older generations are often the leaders of organisations, they have brought with them their own predispositions, values and ideals.”

“The younger generations … coming through the workforce, have their alternative views, and some of those younger generations have a bias towards transparency, and [hence] employees [are] becoming a lot more open with their mental health, [and] their financial wellbeing.”

Based on Gallagher’s economic update, business confidence is waning. Callender said the challenges of financial stress in the broader market and economic environment are flowing through to business owners, people leaders, and employees in the end.

“Financial stress happens to people in good jobs on good incomes, and it’s happening to people inside of organisations at the moment,” Callender added.

In his keynote address at the event, Dean Logan said financial stress used to be viewed as exclusively a people issue, but now it has become directly influential on operational and financial outcomes.

Gallagher’s research revealed that individual financial resilience is strongly linked to optimised organisational financial performance, a key difference this year compared to the past.

“Financial pressure reduces cognitive capacity, [and] reduced capacity creates variability in performance and behaviour,” Logan said. He stated that financial pressure also introduces high absenteeism, more mistakes, burnout, retention pressure, leadership fatigue, claims risk, operational, and consistency drains. Callender emphasised that financial stress risk is something that the finance, risk, and people functions must share.

“It goes beyond working together and cross-functional collaboration. It’s more so a matter of owning the risks together … When people officers and risk officers can identify the risk, and they can come up with strategies that the finance officer needs to sign off on, that is pretty critical,” he said.

“It’s often the view from the top that [senior executives] don’t see that difference between feeling stretched [and feeling stressed] … [Feeling stretched] alludes to the fact that maybe it is temporary, when really [for] those who are stressed [it is] permanent, and they genuinely find it challenging to navigate their own financial wellbeing, and that’s where organisations can really lean in and support them.”

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