The impact of divorce extends beyond the family unit, reaching into the realm of employers and businesses. Companies often find themselves at the receiving end of various costs stemming from their employees’ struggles during a divorce transition—costs that bleed time, energy, money, and even health.

Investing in divorce risk management can prove to be as crucial as investing in other systemic risks like cybersecurity. By doing so, businesses stand to mitigate a cost that consistently affects their bottom line year after year. However, this solution requires the involvement of the right stakeholders.

So, what exactly do businesses stand to gain by proactively investing in divorce risk mitigation?

Recapturing Lost Productivity

Businesses already contend with myriad distractions vying for their employees’ attention, ranging from social media to online shopping. Divorce introduces a new layer of distraction, significantly impacting an employee’s ability to focus on their work. Legal obligations, frequent communication, family scheduling challenges, household transitions, dealing with toxic ex-spouses, and ongoing conversations with coworkers are common distractions that hamper productivity. To quantify the impact, consider a $50,000 salaried employee becoming 25% less productive. Typically, this employee contributes two to three times their salary to the bottom line, amounting to $100,000 to $150,000. A 25% reduction in productivity translates to a substantial loss. Moreover, these distractions may persist even after the divorce is finalized, prolonging their impact on productivity. By addressing these productivity obstacles, businesses can recapture this hidden cost.

Reduce Strain on Senior Leaders and Key Producers

Senior leaders and key producers pose a greater risk during divorces, often becoming entangled in contentious legal battles where their job and perks may be used as bargaining chips. Supporting these employees is vital as they hold invaluable experience, relationships, and expertise critical to the organization’s success. Additionally, they wield significant influence over their peers, affecting overall team performance.

Lower Resignations

Studies show a significant correlation between divorce and job turnover rates, with divorcees experiencing turnover probabilities ranging from 12% to as high as 20%. This turnover rate could mean losing one out of every five to six divorcing employees, resulting in substantial costs associated with hiring and training replacements. Divorcees often struggle to balance work demands with solo parenting responsibilities and face financial pressures, prompting them to reassess their priorities and potentially seek new opportunities.

Lower Absenteeism and Presenteeism

Divorce imposes a direct strain on an employee’s time and energy, often necessitating time away from work to address legal matters. Additionally, the uncertainty and anxiety surrounding contentious divorces can leave employees mentally preoccupied, leading to reduced engagement and productivity at work. Effective coaching can help employees prioritize tasks, manage stress, and stay focused on their work.

Increased Loyalty

Employees who feel supported by their employers during difficult times are more likely to exhibit loyalty. Investing in effective support programs demonstrates a commitment to employee well-being and fosters a sense of loyalty among staff members.

Conclusion

Businesses must acknowledge the hidden costs associated with divorce and take proactive steps to address them. While Employee Assistance Programs (EAPs) are a good starting point, they should encompass more than just legal and therapeutic support. Investing in divorce experts and providing education and support to staff and leadership can help mitigate the avoidable costs associated with divorce, ultimately benefiting both the employer and the family unit.