A new study released today by MissionSquare Research Institute (the Institute) finds that emotional demands in the workplace — more than workload or cognitive effort — are critical factors driving employee stress, reduced well-being, and intentions to leave an employer, with important implications for workforce stability.
As outlined in the research paper, “Beyond Workload: Managing Emotional and Mental Demands To Improve Retention and Worker Well-Being,” the study surveyed more than 2,000 public- and private-sector workers and found that while many roles require both mental and emotional effort, emotional labor is consistently linked to higher stress, poorer sleep, reduced work-life balance, and increased turnover intention.
“Our research highlights a range of often-overlooked challenges facing today’s workforce and underscores the need for employers to rethink how they support employees,” said Zhikun Liu, Ph.D., CFP®, head of the Institute. “When emotional demands go unrecognized or unsupported, they can drive disengagement and higher turnover — ultimately disrupting employees’ financial stability and long-term security.”
Emotional demands drive retention and well-being risks
The Institute’s research highlights a clear distinction between mental labor — such as problem-solving and concentration — and emotional labor, which involves managing feelings, navigating difficult interactions, and maintaining composure under pressure. Over time, this emotional strain can take a toll on workers. Specifically, the research shows:
- 31.7% of employees report that emotional demands make them less likely to remain in their job.
- 25.6% of workers indicate an intention to leave their employer.
- Employees with higher emotional labor are significantly more likely to report increased stress, sleep disruption, and interference with personal and family life.
Conversely, the research finds that organizational culture can significantly influence employee outcomes. Employees who feel comfortable discussing emotional challenges report lower stress and are less likely to leave, underscoring the critical role employer support can play in workforce outcomes.
Workplace experience and financial security
While the research focuses on workplace experience, it underscores a broader pattern in which job instability and turnover can disrupt savings patterns and retirement plan contributions, ultimately increasing financial strain over time.
“Financial security is built over a lifetime, and the workplace can play an important role in that journey,” added Liu. “Employers that address emotional demands and foster supportive environments are not only strengthening retention but also helping employees stay on track toward their long-term financial goals.”
The research also identifies several opportunities for employers to support their workforce better, including the following:
- Recognize emotional labor as a core dimension of job design and workforce strategy.
- Provide training and resources to help managers identify and address emotional strain.
- Encourage open communication and psychological safety in the workplace.
- Integrate emotional well-being into broader employee support and retention strategies.
By addressing emotional labor head-on, employers can improve employee well-being and strengthen long-term workforce sustainability.
Further information and the full report are available on the Institute’s website. Throughout 2026, the Institute will release additional reports focused on financial well-being, retirement planning, financial advice, managed accounts, and more.
About MissionSquare Research Institute
MissionSquare Research Institute identifies and advances best practices in retirement planning, financial wellness, and workforce development strategies to help meet the evolving needs of the public and private sector workforce. Through rigorous, data-driven research, in collaboration with industry-leading thought leaders and academics, the Institute delivers actionable insights and innovative strategies that support MissionSquare’s broader mission to help all individuals and their families build financial security. For more information and access to research and publications, visit research.missionsq.org.
About MissionSquare
Since its founding in 1972, MissionSquare has remained committed to delivering on its mission to help all individuals and their families build financial security. As a mission-based financial services company, we manage and administer over $71.4 billion in assets.* Our commitment to delivering outstanding service, effortless technology, and quality investments sets us apart. For more information, visit www.missionsq.org.
*As of March 31, 2026. Includes 457(b) plans, 401(a) plans, 403(b) plans, Retirement Health Savings plans, Employer Investment Program plans, affiliated IRAs, and investment-only assets.
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