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Ramifications of Divorce & Employee Productivity

Divorce & Employee Productivity

By Todd Singer

Divorce can be an expensive undertaking, especially for those who decide to litigate with adversarial attorneys. We know that divorce also carries costs for those closest to us, our family, our kids, and even our friends. There is another cost that often escapes our notice, but that can still have a measurable impact on our community.

This often-overlooked category is the costs incurred by employers when they have an employee going through a divorce. Divorce is one of the most stressful life events that a person can go through, but divorce can also carry costs for our employers. Studies have shown that these costs are not insignificant and can impact business for up to seven years.

Here are 3 important categories of employer costs to keep in mind.

1)   Productivity

During a divorce, there is often an understandable increase in absenteeism and presenteeism as the employee goes through the divorce process. Their divorce requires their time and attention away from work and often substantial mental energy even when at work. This can result in a 50% to 75% reduction in work productivity, plus an increased risk for alcohol abuse. An employee’s preoccupation with their divorce can even impact their coworkers’ focus and workload as they adjust to the new reality.

It is possible for a positive outcome. Some divorcing employee manages to increase their productivity and effectiveness during or following a divorce. These employees often credit the support and understanding received from their employer. Liberal use of scheduling flexibility, time off, counseling, or even financial assistance can go a long ways towards protecting a business from productivity loss during an employee’s divorce and can often result in an increase in employee loyalty and retention.

2) Financial Loss

Organizational development consultant Dr. John Curtis and his colleagues created a formula for calculating financial loss per divorcing employee. The formula contemplates the salary level of the divorcing employee, and the lost productivity of the employee, their coworkers, and supervisors. On average, the cost to a business per divorcing employee is roughly $83,000 for an employee paid $60,000 a year. Overall, relationship problems, including those unhappily married employees, cost US businesses nearly $10 billion per year in lost profits, increased health insurance costs, and other expenses.

3) Employee Retention

Employee retention can be a significant factor for the long-term health of a business and is often negatively impacted by an employee’s divorce. A 2017 United Kingdom found that 71% of divorced employees left their job within a year, 24% of respondents because they felt pushed out due to the work-related impacts of their divorce. It is possible to retain these employees through appropriate support, whether it be access to counseling, divorce planning, scheduling flexibility, or encouraging employees to seek an amicable settlement through mediation. As mentioned previously, helping an employee successfully navigate their divorce can not only salvage their productivity but also secure their long-term loyalty.

Do you have questions about divorce? Call the San Diego Family Mediation Center office at (858) 736-2411 today for more details about divorce mediation.