How do Financial Literacy, Financial Behavior, and Financial Well-Being Affect Presenteeism?

Presenteeism refers to a situation in which an employee performs less optimally due to problems such as poor health, job dissatisfaction, family conflicts, and financial difficulties. This often leads to decreased productivity, which is detrimental to employers. The main objective of this research is to examine the role of financial well-being in mediating the relationship between financial literacy and presenteeism and the relationship between financial behavior and presenteeism. To investigate the issue, we used data collected through a survey of 175 employees at a government agency in Indonesia and then conducted partial least squares structural equation modeling (PLS-SEM) regression technique. We find that financial behavior directly and negatively influences presenteeism, suggesting that presenteeism can be reduced if the employees maintain good financial behavior, which can eliminate financial difficulties as one of the sources of presenteeism. We also find that financial well-being, although it has no direct role in reducing presenteeism, can significantly mediate the effect of financial literacy on presenteeism. Employees with good financial literacy, in our case, cannot directly reduce presenteeism, but financial literacy will decrease presenteeism only if the employees have good financial well-being. Our finding recommends employers to increase their employees’ financial literacy and behavior to minimize presenteeism.