Could Your Shaky Personal Finances Get You Fired?

Work office money issues
Work office money issues

Money troubles are hard to contain, and if your own finances are in shambles, the problems can quickly bleed through to the rest of your life. As private as you hope to keep such issues, don't kid yourself into thinking that you can hide them from your employer.

According to a recent study by the Society for Human Resource Management, some 83% of HR professionals think that personal financial challenges have at least some impact on employees' performance. Those same HR professionals aren't blind to economic reality -- 80% of them believe that employees at their organizations are facing more financial challenges than they were five years ago.

And it's not a stretch to connect the dots: How you manage your own money can have an impact on the work you do for your company.

Why HR Is Worried

Human resources managers worry about more than just employee well-being. The well-being of the company matters to them, too. If they suspect an employee's financial situation is challenging, you can bet that they've got at least one eye out for the risks that employee may pose to the company.

Though the consequences are unpleasant, the logic is fairly straightforward: If someone can't maintain control of their own financial situation when their personal money is on the line, what would make them motivated to be a better steward of the company's money belonging to nameless and faceless shareholders?

That said, at most companies, having personal money troubles are not a fire-able offense. But if your performance is slipping, the odds are slim that your boss will pick you for the next available role of increasing responsibility. If the company also has reason to believe money troubles are behind your performance slippage, you can expect significantly tighter scrutiny on whatever areas you do have any individual discretion over.

Anatomy of a Career Death Spiral

Limited advancement opportunities. Higher likelihood of being micromanaged. And the generally lower raises that come with being viewed as anything other than a rock-star performer these days.

These aren't exactly the ingredients for fast job advancement -- or even a very satisfying career. But it's the negative spiral of what can happen at work for those with money troubles at home that spill over to affect job performance. And that's assuming the employee remains a paragon of ethics and virtue.

Is it fair to have career troubles just because you're having money troubles at home? Probably not, but speaking frankly, whether it's "fair" or not doesn't really matter. It is what it is.

Those who actually do cross the line into downright illegal behavior shouldn't expect to remain employed for very long, especially if they've already been flagged as a financial risk and are being closely watched.

Of course, your best shot at avoiding that particular career death spiral is to be so in control of your money that nobody has any reason to suspect you're having troubles. However, if you are dealing with financial hardship, there is plenty you can do to keep your at-work performance and reputation intact.

Stop Showing Off

If you are having money troubles, the first step toward regaining control is to stop trying to put on flashy displays of wealth you don't really have. You're neither fooling nor impressing anybody by showcasing your spending, and your employer already knows what you make. Spending money faster than your boss knows you're earning it is a major red flag and can actually invite more scrutiny, not less.

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You still need to dress appropriately for your job and to maintain reliable transportation to get you to and from work. But a $21,000 Kia Optima -- or even a reliable used car -- should be able to get you to work just as well as a $173,000 Porsche Panamera Turbo S. And, a reasonably priced ride won't raise the overt question of how you could possibly afford it on your salary.

Even in less instantly obvious ways, getting in control of your finances is largely a matter of understanding -- and making tough choices -- on how and where you spend your cash. Brown-bagging your lunch can easily save you between $20 and $40 a week versus eating out, and home-brewed coffee instead of a couple daily cups from the coffee shop can have a similar impact.

No matter how you choose to cut back, doing so will help you get in control of your finances. And with control over your finances, you'll gain the opportunity to stop the career death spiral that otherwise threatens to turn some short-term cash flow issues into a serious long-term problem.

Ultimately, in the long run, being a strong steward of your own cash gives you many more opportunities elsewhere. In the short term, especially in this employment market, it will help you keep and move forward in the job you have today.