HR Manager's guide to employee financial wellbeing.

Introduction.

Financial Wellbeing isn’t always something that is considered when planning a workplace wellbeing programme, even though it is one of the main causes of stress among workers. This guide will help HR professionals, or those responsible for the wellbeing of employees, in an organisation to understand how financial worries may be impacting their colleagues. With 62% [1] of multinational companies vowing to introduce a Financial Wellbeing programme within 3 years, it’s important to be aware of the various elements of an effective and engaging programme.

[1] https://www.aon.com/getmedia/0ea709bd-182f-45df-9a5c-d6860f0daff5/Financial-Wellbeing-Study-Results-Events-July-2018-FINAL-DECK.aspx

What is financial wellbeing?

Financial wellbeing refers to the skills and knowledge needed to manage personal finances in a healthy, secure fashion. Positive financial wellbeing leads to greater feelings of security and confidence about their overall financial situation, and has a positive effect on mental health.

With 43% of employees under the age of 35 and 32% of those over 55[1] expressing that they feel they could never have what they want in life due to financial constraints, it’s no wonder companies are planning to place greater emphasis on Financial Wellbeing. Many employees appear to be anxious about their current and future financial positions, despite feeling that they are doing all they can, within their means, to achieve financial security. Add to this the fact that UK organisations are losing more than £1bn a year through absenteeism and presenteeism[2] relating to poor financial wellbeing, it’s time for organisations to look at how they can help.

[1] https://www.aegon.co.uk/content/dam/ukpaw/documents/financial-wellbeing-and-productivity.pdf

[2] https://www.aegon.co.uk/content/dam/ukpaw/documents/financial-wellbeing-CEBR-condensed.pdf

How does financial wellbeing impact employees?

It shouldn’t be underestimated how greatly external sources of stress and anxiety can impact an employee’s performance at work. According to research carried out by Aegon, more than 500, 000 employees in the private sector due to financial stressors. There is no denying that employees are being impacted.

          Productivity

The centre for Mental Health suggests that the cost of presenteeism associated with mental health issues is 1.5 times the cost of absenteeism related to mental health

issues[1]. Presenteeism refers to the act of being present in work but being unproductive for any number of reasons. One such reason is being distracted by external stressors, such as financial worries. More than 11% of employees have admitted that financial concerns have caused them to be unproductive during working hours, costing up to an hour a day per person in productivity.

            Mental Health

It’s important to note that half of adults with debt issues have reported also having mental difficulties as a direct correlation. Mental Health difficulties are one of the largest causes of absenteeism and presenteeism in the workplace, causing 56% of cases[2]; this is not something organisations can afford to ignore.

To learn about Workplace Wellbeing Programmes, read what we have to offer. 

[1] According to research carried out by Aegon, more than 500, 000 employees in the private sector

[2] https://www.cipd.co.uk/Images/health-and-well-being-at-work-infographic-1_tcm18-40892.pdf

Employee financial wellbeing in numbers.

Let’s look at how employees are being impacted by poor financial wellbeing

-19% of employees lose sleep because they worry about money

-10% find it hard to concentrate or make decisions at work because of financial concerns

-8% spend time during the day dealing with personal finance problems

-6% have had health issues cause by stress relating to finance

-500,000 employees have missed work to deal with financial issues

-51% of employees say that financial wellbeing is a worry for them

-71% think that they would be much happier if they had better financial wellbeing

Barriers to financial wellbeing

Employees are met with several barriers when it comes to managing their money. [1]

-29% say they only earn enough to get by

-16% say there is too much hassle involved in finding ways to cut back on spend (e.g. switching energy suppliers)

-13% say they don’t have time

-11% say they don’t understand the terminology in the financial industry

-9% say they can’t afford to get advice.

[1] https://www.cipd.co.uk/Images/financial-well-being-employee-view-report_tcm18-17439.pdf

How can organisations help?

Organisations have the power and means to address these barriers by introducing a workplace financial wellbeing programme.

A feeling of taking back control of one’s own financial wellbeing has been shown to be impactful in combatting workplace financial stress. When employers invest in financial wellbeing, they are providing them with support and education that will help them to take ownership over their own financial situation. With access to impartial financial wellbeing experts, employees will be able to design ways to better manage their money and alleviate any additional stress their financial situation may be causing.

Integrated programme

Spectrum Life’s wellbeing experts recommend that financial wellbeing is not just a once-off element of a wellbeing programme. Instead, it’s suggested that it is integrated into the programme as part of a something comprehensive that helps employees address all aspects of their wellbeing.

This way, education and guidance on personal financial matters can be delivered iteratively to ensure that employees are getting the most of each aspect. An integrated financial wellbeing programme should include debt management, household budgeting, personal taxes, saving, projecting and retiring.

Mixed media

To ensure all employees benefit from the programme, it is suggested that the programme is delivered through a variety of formats, meaning the information is accessible to all workers. Different methods can include:

-Seminars

-Webinars

-Articles

-One-to-one consultations

-Workshops

This means that whether an employee works shifts, remotely, or 9-5, they will be able to avail of some kind of education and support to help improve their financial wellbeing.

One-to-One consultations are becoming increasingly popular as it affords employees the opportunity to get into detail with their financial situation and get advice from a qualified and highly experienced professional.

Workshops, meanwhile, deliver truly independent but coordinated financial advice to your managers, helping them to devise financial wellbeing plans for their teams, and perhaps even help them to address their own financial stress.

Learn more about how a Financial Wellbeing Programme Works

Help them plan for the future

We all know the saying “if you fail to prepare, you prepare to fail”. It may be at its most relevant when talking about personal finance. Finances are not something the average employee will be confident in managing, much less when they feel overwhelmed by debt or similar pressures. Without a plan, they could be going in the wrong direction, and the organisations they work for can help.

Some ways an organisation may be able to assist employees in planning for their future include:

-Communication of available pension schemes and other benefits which may help them save

-Wide availability of a financial wellbeing programme

-Provide access to independent financial advisors

Read more about helping employees plan for the future

Benefits for employers.

By investing in a financial wellness programme, employers promote and support a positive workplace which in turn has several benefits, most notably in an increase in productivity and employee retention.

Productivity

The outcomes of Financial Wellbeing Programmes include reduced absenteeism and presenteeism, less external distractions, and less time spent managing personal financial matters at work. This all amounts to improved levels of productivity among employees.

While increasing salaries and adding benefits are of great help to employees, being encouraged to understand the value of their reward package and how to maximise their take-home pay is of higher value to their wellbeing.

When employees trust the organisation they work for and the independent experts they make available to them, they feel supported and cared for, which increases staff satisfaction. Ultimately this results in a want to do the best work they can for the company. Additionally, with onsite seminars and consultations available, the number of days missed due to dealing with financial worries will dramatically decrease.

Employee Retention

Employee retention is one of the primary targets for many HR departments, and Financial Wellbeing is one such way to encourage this. Employees who feel that their concerns are being addressed and cared for by their employees are more likely to remain loyal to the business. This means the organisation maintains an experienced team with invaluable knowledge.

How employees will benefit.

The benefits for employees are clear; they can avail of free, independent insights and support through qualified financial advisors. Better still, these resources are delivered in a way that suits their schedules and personal preferences, keeping everything 100% confidential.

In absence of company-sponsored Financial Wellbeing Programmes, many employees would be unsure of how to navigate their quest towards financial wellbeing.

This is just a snapshot of how employees can benefit from a workplace financial wellbeing programme, there are many benefits that will see their lives and their work improve noticeably.

Is your organisation one of the 62%  considering introducing Financial Wellbeing programmes to the workplace? Talk to a Wellness Advisor today about how Spectrum.Life can assist.

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