How late paychecks impact employees and organisations

It was the end of the month. Iqbal, an NGO worker, sat at his desk, staring at his phone, waiting for a notification that had yet to appear.

The salary deposit text, which he relied on, was delayed yet again. With unpaid rent looming and a growing pile of bills, he was forced to resort to borrowing from colleagues, knowing he would likely have to do the same next month.

"Late paychecks affect us financially, but the impact doesn't stop there. For those with family support, it's easier to manage. One of my colleagues lives with his parents, so his salary is just pocket money. But for people like me, who support themselves entirely, it's a huge burden," said Iqbal.

He went on to say that it wasn't just about the money — it was about the relentless cycle of debt, the mental exhaustion, and the loss of motivation that came with it. 

"We lose focus at work, constantly weighed down by financial stress. Anxiety haunts us all the time," he said.

Iqbal's story resonates with many employees across industries facing the same issue. From NGOs to media houses, creative agencies, and even prestigious universities, salary delays continue to leave workers financially unstable and emotionally drained.

"Employees structure their lives around stable pay cycles, which serve as a foundation of job security. When this cycle is disrupted, the resulting instability mirrors the emotional impact of a personal crisis, leading to dissatisfaction and disengagement, regardless of intrinsic motivators like career growth or recognition."

Dr Md Kamal Uddin, Professor of Psychology, Dhaka University

Passion fades when paychecks don't arrive

Asru, a journalist at a private media company, started her career with enthusiasm. But over time, that passion dimmed as salary delays became the norm.

"To be honest, it's incredibly discouraging," she said. 

"When you give your best effort but don't get paid on time, it completely drains your motivation. I often ask myself, 'Why am I even doing this?'"

She said the uncertainty of finances forces employees into uncomfortable situations. 

"I often have to ask my mum for help or borrow money from close friends. It's humiliating," she admitted.

Beyond personal struggles, Asru said the issue also affects workplace dynamics. 

"Some colleagues choose to work from home because of the uncertainty. You can see the impact on their commitment," she added.

"At first, I liked working here. But once the salary delays started, I began to wonder—does this company even respect its employees? It's hard to stay loyal when something as fundamental as timely pay isn't a priority," she said, frustration evident in her voice.

A threat to well-being

For Musa, a creative artist, the situation is even more dire.

"I don't earn much, and whatever I do get paid, I need immediately to sustain my life and family. My bills are due in the first week of every month, whether my paycheck arrives or not," he explained.

"For me, money is survival. If the company delays my paycheck, my entire life cycle is disrupted," he added.

In creative fields, inspiration and passion drive quality work, but financial instability crushes that spirit. For employees like Musa, a delayed paycheck isn't just an inconvenience—it's a direct threat to their well-being.

Even in prestigious private universities in Dhaka, salary delays are affecting not just local employees but also international staff. 

Richard, a Singaporean faculty member working in Bangladesh for two years, expressed his frustration.

"I am extremely unhappy with the situation. Globally, salaries are disbursed on the last day of the month or at most within the first week. Anything beyond that is unacceptable," he said.

He stressed that an institution employing international staff should follow global standards. 

"This isn't just damaging their reputation—it's also shaping a negative impression of Bangladesh in the international community," he said.

The psychological toll of financial uncertainty

Dr Md Kamal Uddin, a psychology professor at Dhaka University, highlighted the severe mental impact of delayed salaries.

"According to Herzberg's Two-Factor Theory, salary is a key hygiene factor. Its delay creates financial instability, leading to chronic stress. Employees facing uncertainty about their income experience anxiety, sleep disturbances, and even symptoms of depression, which directly affect productivity and engagement," he explained.

He compared it to an internal "financial clock" that employees rely on. 

"When salaries are delayed, this cycle is disrupted, creating emotional distress similar to a personal crisis. Employees lose trust in their employers, which leads to dissatisfaction, disengagement, and decreased performance," he added.

How organisations suffer

Abraham Maslow discusses this in his book Motivation and Personality with Maslow's Hierarchy of Needs.

There he explains that late paycheques impact both employees and organisations. When salaries are not paid on time, trust between employees and employers weakens, leading to decreased loyalty, increased absenteeism, and lower overall work performance. Many talented professionals leave their jobs due to financial instability, making timely salary disbursement a critical responsibility for employers.

To prevent delays, organisations should establish contingency plans, such as emergency funds or structured financial planning. Employees, on the other hand, can document salary delays and raise concerns with the HR department to ensure accountability.

A call for change

In today's world, financial security is not a luxury—it's a necessity. Delayed salaries disrupt lives, impact mental health, and damage organisations. Employers who fail to prioritise timely paychecks risk losing their most valuable asset—their people.

The longer companies ignore this reality, the more they jeopardise not only their employees' well-being but also their own success.

(All characters in this article are real, but their pseudonyms have been used to protect their identities.)