As an employer identifying that employees are struggling with their own financial situation is often the most challenging part. There is a stigma that exists within UK work culture around finances and money – and this is dangerous because the more the issue is concealed, the bigger the impact will be on the employees as well as overall wellness of the business and its productivity.
What is financial wellness?
Financial wellness doesn’t depend on salary or general wealth. It’s defined by the act of managing personal financial situations and budgeting within the confines of your own earnings – and doing it in a confident and secure way.
Being financially assured doesn’t come naturally to many and is something that requires time, effort and understanding. Therefore, it’s important for all businesses to offer financial wellbeing programmes that allow their employees to gain a richer understanding to reduce levels of stress and anxiety.
A recent CIPD report found that the most important aspect to financial wellbeing programmes was confirming that employees earned enough to ensure a good quality of life for them and their loved ones, indicating that this level of reassurance is needed and is helpful to employees.
As an employer it might be time to start looking at the benefits you offer to your employees and consider whether these could be designed with financial wellbeing in mind. Are there perhaps other ways you could be supporting the talent within your organisation, be it advice and guidance around saving, or effective debt management? If so, this could not only boost productivity levels, but it could also help retain talent.
Financial wellness – what is this costing your business?
The CIPD reported that 1 in 4 employees have said that money worries have affected the way they carry out their job, which has a direct impact on productivity.
In 2017, PwC surveyed 1600 full-time employees on financial wellness and found that ‘not having enough emergency savings for unexpected expenses’ was cited as the biggest financial concern across all generations. YouGov also reported that 31% of UK workers struggle to pay an unexpected bill of £500 or more. This implies that guidance is heavily needed in this area. Firstly, for the individual to feel financially secure and to budget confidently and secondly, it’s important for the company to teach employees these skills to ensure their business won’t be impacted by the growing unawareness around financial wellness for all.
In the same PwC survey, 81% of the millennials claimed that they suffer from financial stresses, causing a further 55% to be distracted at work.
Stress and poor mental health is a long-lasting issue that financial stresses can cause. One of the key findings from Britain’s Healthiest Workplace report 2017 was that more than half the respondents in the 26-40 age category had some form of financial concern, which then led to the finding that the employees with financial concerns were seven times more likely to be depressed, and twice as likely to become obese. In addition to these findings, 72% of respondents with financial concerns suffered from work-related stress.
All this research clearly indicates that more needs to be done to promote the importance of financial wellness?
Trust and stigma surrounding financial wellness
Managers and leaders are in a unique position within the modern work of workplace to create and foster cultures in which speaking about money issues is acceptable. They can create trusted and safe environments in which employees can eventually feel safe and unburden their money worries with a trusted advisor within their place of work.
Two in five workers throughout the UK have less than £100 in savings, which reinforces the point that employees are constantly worried about unexpected bills that could surface at any time because they have too few savings – which is something UK workers are not discussing.
It has also been reported within the Money And Mental Health Policy Institute report, ‘Overstretched, overdrawn and underserved’, reported that there is a link between personal mental health and financial stresses. Two thirds of employees who struggle financially show at least one sign of poor mental health, which could be having an impact on the productivity of their day-to-day work, such as lacking in motivation or evident reduced sleep.
As an employer, do you agree that you have a responsibility to ensure your employees are as educated about financial wellness as possible?
By giving your employees a well thought out financial wellness plan, you’re empowering them to take ownership of their finances, giving them insights they previously wouldn’t have had access to or knowledge about. This will pave the way for them to feel more financially secure, and therefore more settled in their role, allowing them to prosper both professionally and personally.
Webinar: How to help people and businesses thrive through financial wellbeing
Financial wellbeing expert, author and Head of Financial Education at Salary Finance, Jason Butler, will discuss how financial wellbeing can retain top talent and drive productivity within organisations. Jason will also discuss how crucial an all-round personal financial wellbeing education is to everyone in a business, and how these strategies can be implemented to enable your business – and people – to thrive.
Attend our 30 minute webinar on Thursday 31st May, at 3pm – click here