Wellbeing, the term on every employers’ lips.
Almost all employers have an idea that their employees are likely to be struggling with personal debt, after all we read every day that it is prevalent across all demographics, geographically and business sectors. They also realise that if they could fix that in any way that doesn’t necessarily involve an increase in salaries, it is also highly likely that morale and productivity would literally sky rocket. Yet they are relatively slow to address the issue, even though inexpensive and even free options exist that are proven to definitely help.
So what is “Financial Wellbeing” and just why is it so important?
Financial wellness is a term used by organisations and companies offering financial support, education and ultimately beneficial services to their employees. In today’s post COVID/lockdown world if you’re an employer who doesn’t offer a financial wellness program, you’re are most definitely now in the minority. In fact in a recent Bank of America’s 2020 Workplace Benefits Report 1,000 employees and more than 800 employers gave detailed answers to a wide ranging collection of financial questions and yet one huge contradiction stood out. While more than 80% of employers “believe financial wellness tools lead to greater productivity,” only around half actually offer those tools?
The report states that the additional stresses related to the coronavirus have elevated the topic of well-being in many ways. Employees are likely facing increased stress levels, greater demands on their time and potentially the added complexity of simultaneously working from home and serving as a full-time caregiver. While the effects of these unprecedented times have yet to be fully understood, employees have already noted an increased strain on their physical and mental health, a greater impact on the interactions between all aspects of their well-being and increased impact of overall well-being on productivity. These trends are likely to continue until things return to normal.
So as wellbeing becomes a focus for organisations irrelevant of the size of their workforce, there will be a more prominent expectation to assist its employees more than it currently does. In the case of financial wellness, this shouldn’t be seen as an issue but as a golden opportunity…and here are just some of the reasons why:
Past study Financial Advice Working Group have definitely shown that financial stress among employees leads to more sickness or absenteeism costing the UK economy £121 billion and 18 million working hours in time off work each year . Even when they are at work, financial stress in anyone’s personal life distracts from daily tasks and could affect the decisions or contribution. One in four workers say they have lost sleep over money worries, with poor sleep contributing to reductions in people’s concentration and quality of performance.
Higher levels of financial stress can also result in higher absenteeism – a study by Wilson Tower Watson found that 19 work days a year were lost to absence in a group with high financial stress, compared with 11 work days a year in a low financial stress group. This kind of absenteeism and presenteeism (people coming to work ill) cost businesses approximately 4 per cent of payroll costs per year.
Build A Stronger Team
Good benefits in a competitive world help to recruit the very best talent for your business and in the modern world that probably means more than dental or even health insurance. The same study by Wilson Tower Watson shows that financial wellness program is the most popular and favourable benefit amongst employees. That puts your people at the very heart of your organisation clearly shows that you have their best interests at heart away from the workplace as well as in it and that can really appeal to potential candidates. It standing out as a progressive and caring organisation and allow you to stand out from the usual medical, dental and voucher strategies of recent years.
It is not Financially Prohibitive
Firstly there is a whole wealth of education, advisory and freely available financial information from both private, public and charitable organisations. But if you’re looking to go just a little further than resources that your people can access themselves, then taking a flexible approach to their pay cycle is an interesting development. Sometimes termed as ‘On Demand Pay’, this type of service is proven to improve morale, retention and productivity while at the same time removing the reliance on easily available and very expensive short term credit. The range of services do vary, as in some cases the providers are still lending the advance albeit for a transactional based fee. However as this relatively new marketplace produces variations on breaking the 4-5 weekly pay cycle, companies such as fastPAYE offer it free to employees and allowing employers to retain control by deciding when and how much their team can access, usually just a small fixed amount that doesn’t encourage a reoccurring debt cycle.
Employers should do more
The workplace offers one opportunity – out of many – to engage and guide people on how to manage their finances. It is a place where people already engage with money through wages and pensions. Employers have a vested interest in helping their employees improve their financial well-being: reducing financial worries amongst employees could raise staff morale and performance, increase trust between employers and employees, and improve retention levels. Using the workplace as a conduit for financial help offers a win-win opportunity for employees and employers according to the Financial Advice Working Group.