In light of events of this past year and the resultant money worries and impact on mental health, financial well-being in the workplace has markedly moved into the spotlight. But how can employers help promote – and safeguard – the financial security of their staff? We shine a light on this significant subject.
As an employer, supporting the well-being of your workforce is a win, win situation – after all, there’s conclusive evidence that happier employees not only make for a more congenial workplace, but improved productivity too.
Yet alongside promoting physical and mental health, there’s the burdening issue of financial well-being to consider, too. And, actually, it might not be that clear-cut for employers to know how best to safeguard the well-being of their staff, especially when it comes to finances?
The burden of finances
What, indeed, is financial well-being? According to the Money and Pensions Service, it’s all about feeling secure, confident and empowered, as well as having control of your finances. A lack of financial well-being can have serious and long-term ramifications for individuals, households, employers and society at large.
Finances are the main cause for concern for the majority of people – 26% of us are worried about money on an ongoing basis, ahead of careers (22%), health (18%) and relationships (14%).1
The coronavirus outbreak and associated lockdowns have aggravated these financial woes, with 37% of working people revealing that their household’s level of disposable income had dropped since the start of the pandemic, with those on a low income particularly affected.2
Yet can financial worries impact people, whatever their level of income? Research indicates that a third of C-suite executives and three in 10 managers have poor financial well-being, while employees who earn in excess of £90,000 a year have almost the same level of financial worries (24%) as those earning between £10,000 and 30,000 a year. More expensive lifestyles and greater access to credit often go hand in hand with higher salaries.1
It goes without saying that financial stress can be damaging to an individual’s mental health and therefore on their ability to perform well in the workplace.
“It naturally impacts your working day and your productivity,” comments Harriet Shepherd, Workplace Financial Well-being Proposition Manager at St. James’s Place Wealth Management. Your confidence and concentration can be affected by stress, not to mention the way in which you communicate with your work colleagues.
Financial well-being is priceless
One thing’s for certain – it’s in any organisation’s best interests to take this issue seriously, given that employees are their most valuable asset. Approximately 4.2 million worker days are lost each year due to a lack of financial well-being, amounting to £626 million in lost output.3
CEBR research discovered that 7% of employees surveyed were offered face-to-face counselling and advice by specialised staff or external consultants to target specific questions.3
“With well-being programmes being at the forefront of organisations’ minds, the financial well-being component is an under-supported but massive factor,” says Shepherd.
Well-being within reach
Employers are often the first port of call when workers seek support with their financial well-being, yet a report by Aegon found that, while 71% of employers believe that their employees would have greater happiness at work if they were to have improved financial well-being, many businesses are still at odds as to how best to support employees in this regard.
Only half of the firms surveyed said they would be able to provide information to staff on debt issues, with 38% admitting that they didn’t fully understand the level of financial information they could offer employees.4
But there’s hope on the horizon, according to Shepherd, who says that a growing number of employers plan to provide financial well-being programmes.
“The big thing we speak to employers about is their employee well-being goals. It’s about choosing a financial well-being approach that best suits both their goals and the needs of their employees.”
For example, a large organisation might implement scalable video-conferencing materials, so a wide audience of employees can be reached. In smaller firms, however, it could be more manageable and effective to work with people one-to-one.
Talk it out
“A lot of organisations have good financial rewards, such as bonus schemes and salary sacrifice, but part of well-being is translating those packages into real conversations, so that employees can understand what it means for them,” Shepherd adds.
Working with partners, such as financial advisers, can also help empower employees to make informed decisions regarding their finances.
“We focus on our face-to-face approach, but we work in many cases with or alongside other well-being providers within organisations,” says Shepherd. “The more that different providers collaborate, the more we’re addressing the holistic needs of employees.”
If you’re interested in discovering more about how the team at Wellesley can support you and your employees, please get in touch – after all, a problem shared is a problem halved.
Join in the National Wellness Conversation.
1 The Employer’s Guide to Financial Wellbeing 2020-21 (copies can be requested from salaryfinance.com)
2 TUC, The impact of the pandemic on household finances, February 2021
3 Centre for Economics and Business Research, Financial wellbeing and productivity: a study into the financial wellbeing of UK employees and its impact on productivity, 2018 (total sample size: 2,000 UK employees)
4 Aegon, Financial wellbeing in the workplace, 2018 (total sample size:500 HR decision-makers from a representative sample of British businesses)
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