In today’s fast-paced world, where uncertainties are rife, the importance of financial wellbeing cannot be overstated. Financial health is crucial to our overall wellbeing like physical and mental health. It encompasses our ability to manage day-to-day expenses, navigate unexpected financial challenges and plan for a secure future.
Recently, the COVID-19 pandemic and the ongoing cost-of-living crisis, characterised by rising housing costs, stagnant wages and increasing debt burdens, have highlighted the fragility of financial stability for many individuals and businesses alike. As an employer, you can play a pivotal role in supporting the financial wellbeing of your employees. By prioritising their financial education and providing support, you contribute to their welfare and enhance your business’s overall performance and sustainability.
Let’s explore three reasons to invest in your employees’ financial wellbeing and consider actionable strategies for cultivating it within your organisation.
1. Financial Wellbeing Fuels Our Sense of Stability
Financial wellbeing is not just about monetary figures; it gives us a sense of security, resilience and empowerment when managing our finances. Despite these benefits, a study of UK working-age adults paints a stark picture:
- 21% rarely or never save
- 22% have less than £100 in savings and investments
- 51% couldn’t last three months without borrowing if they lost their main source of income
- 47% have no plan for financial goals for the next five years
- 61% do not focus on the long term when it comes to money
(Source: Money and Pensions Service)
Financial stress is a widespread issue, with 77% of workers in the UK and Ireland experiencing it in the past year alone. This stress manifests in various ways, from diminished productivity to increased absenteeism, ultimately affecting employee wellbeing and organisational success.
2. Financial Wellbeing Has a Direct Impact on Employee Performance
The ramifications of financial stress extend beyond the workplace, permeating into individuals’ mental and physical health. Anxiety, depression and feelings of hopelessness often accompany financial woes, impacting overall quality of life.
Physical manifestations of financial stress include headaches, digestive issues and heightened susceptibility to illnesses. Additionally, financial worries exacerbate job performance issues, leading to absenteeism, presenteeism and diminished engagement. In a study of UK working adults by Unmind, 53% believe that financial worries reduce their ability to do their jobs as usual. This should be a cause for concern for employers, as it directly affects the productivity and wellbeing of their workforce.
It doesn’t end with the employee experiencing financial worries. The repercussions of diminished productivity can be profoundly disruptive. When one team member falls behind in their workload or fails to meet expected quality standards, the entire team feels the strain. Others must shoulder additional responsibilities atop their already demanding tasks, resulting in heightened stress, anxiety and fatigue for all. This domino effect can perpetuate a cycle of decreased productivity, exacerbating the challenges faced by the team.
3. Financial Wellbeing Impacts Your Business More Than You Think
Financial stress affects workplace dynamics, leading to decreased productivity, heightened absenteeism and diminished job satisfaction. This ripple effect can result in increased errors, reduced efficiency and a general decline in the quality of work across the organisation. Businesses lose 4.2 million working days each year in absences because of a lack of financial wellbeing, the equivalent of £626 million in lost output, according to research conducted by Money and Pensions Service. Employees grappling with financial worries are more prone to errors, lack focus and are less efficient, creating a ripple effect across the organisation.
Furthermore, poor financial wellbeing correlates with higher turnover rates, posing significant financial implications for businesses. The cost of recruiting, training and onboarding new employees far exceeds the investment required to support existing staff in improving their financial literacy and stability.
Improving Your Employees’ Financial Wellbeing
Being aware of the link between financial and overall wellbeing, employers can take proactive measures to support their employees, including:
- Offering financial education programs covering budgeting, debt management and investment strategies.
- Implementing supportive company policies, such as fair compensation practices and transparent communication.
- Providing access to resources like financial counselling services and health promotion initiatives.
- Fostering a culture of openness and inclusivity around financial discussions, encouraging employees to seek support and guidance.
Prioritising employees’ financial wellbeing isn’t just a moral imperative; it’s a strategic investment in your business’s success and longevity. Equipping your workforce with the knowledge and resources to navigate financial challenges not only empowers them to thrive personally and professionally but also sets the stage for a more resilient and high-performing organisation in the long run. The benefits of such investments are not just immediate but also long-lasting, contributing to the overall growth and success of your business.
Remember, a financially secure and engaged workforce isn’t just a benefit for individual employees – it’s the cornerstone of a resilient, high-performing organisation.
Want to learn more about the importance of financial wellbeing in your workplace? Download our complimentary ‘Introduction to Financial Wellbeing’ whitepaper here.
Financial Wellbeing Workshop for Employees
Our Financial Wellbeing Workshop offers comprehensive education tailored to empower individuals to manage debt, make informed financial decisions and build resilience against economic uncertainties. By investing just one hour of your employees’ time, you can foster a culture of financial literacy and empowerment that drives success for your organisation.
Need Advice?
If you’re ready to embark on the journey towards a financially healthy workplace, contact us today on 02920 109222 or at financial.wellbeing@thomas-carroll.co.uk. With our wealth of experience working with businesses of all shapes and sizes, we’re committed to helping you create a thriving workforce equipped for success in an ever-evolving economic landscape.
