Over the past 10 years, a growing number of employers have begun to make improving the financial wellbeing of their employees a top priority, seeing it as key to higher productivity and a way to improve staff retention.
Indeed, Buck’s 2018 Global Wellbeing Survey found that 81 per cent of employers aspired to have a culture of wellbeing, while 75 per cent viewed support for staff wellbeing as an important element in their employee value proposition, a huge increase from 38 per cent in 2016.
The drive towards employee financial wellbeing has also been reflected in British politics. During 2019, MPs have stepped up their attempts to ensure flexible working becomes a legal right for all workers across Britain, arguing that it would help improve gender equality, assist parents and help retain staff.
It’s easy to see why so many in the professional and political spheres are keen to make financial wellbeing a centrepiece of the workplace. Concerns over money is one of the biggest reasons why people have left their jobs in recent times. Investors for People, a standard for people management, found in 2017 that money was the main motivator for more than half of job-seekers who were looking to leave their current role, with 47 per cent claiming that just a small pay increase would raise their happiness levels.
Worrying about money at work extends far beyond those looking for a new job, however. The 2019 Close Brothers Financial Wellbeing Index discovered that over three-quarters of employees believed financial concerns impacted them negatively at work, with 39% almost constantly worried about money.
This constant worrying about money was particularly prevalent amongst younger workers, with many employees suffering from low financial wellbeing as a result. Many graduates enter the workplace burdened with tens of thousands of pounds worth of debt and don’t have the sufficient understanding of financial services, like pensions and investments, to manage their money effectively.
For example, before entering work, some don’t understand the importance of contributing towards a pension when they won’t be able to access it until over 30 years later, or the impact that taxes and NI contributions can have on a pay-check. This can lead to younger workers experiencing cash flow problems almost immediately after joining a role, which can put them on the backfoot from the start.
Low morale, lower results
Having even a few employees struggling with financial wellbeing can have a significant effect on a company. Recently, it was estimated that employees suffering from stress, anxiety and depression cost British employers an average of over £1,000 per employee, per year, while Barclays believed the figure to be around 4 per cent of an employer’s payroll.
This is not just through lost workdays caused by absenteeism and stress-related illness, but also through stressed employees being more susceptible to mistakes. If a workforce is constantly at breaking point, bad decisions will undoubtedly be made. For smaller companies going through uncertain times, losing thousands of pounds as the result of avoidable errors could mean make or break.
In the workplace, office morale can also drop, causing employees to focus on their own problems rather than creating a positive atmosphere. Additionally, those too preoccupied with their own finances will more likely feel apathetic towards how the company itself performs, which can also limit its potential.
Empowerment through engagement
What most workers, particularly the younger ones, want and need is to feel empowered at work. Employers can achieve this by creating a long-term, comprehensive wellbeing programme, built on a thorough data analysis of their specific workforce and how to best cater to their unique needs.
Once these solutions are in place and employees have a financial wellbeing programme that suits them, employers must also maintain it. To this end, employees should be engaged on why financial wellbeing is so important and must be given the tools they require to manage their money independently.
Financial wellbeing programmes can’t just be a passing fad; there needs to be constant engagement with staff, the breaking down of cultural barriers around money, and making sure employees feel responsible for their finances. When this becomes a regular cycle, productivity levels will begin to increase rather than decrease.
Getting it right
Workplace perks that enhance employees’ financial wellbeing are quickly becoming the norm, with companies aspiring to have a high level of wellbeing among employees to raise productivity and retain staff. This shift has come in the wake of numerous studies which highlight the depth to which many in Britain suffer from low financial wellbeing and the negative impact this has on their work.
However, the programmes that employers put in place can’t be prescriptive. In order to reach their full potential, these schemes need to be tailored to the workforce’s specific needs and act as tools towards the empowerment of workers. This is best achieved through careful data analysis and regular communication with workers, as well as engaging with staff and making sure the programmes are doing the job they have set out to do.