How can employers build the case for aligning financial and mental wellbeing strategies?

Need to know:

  • Financial worries affect the bottom line, with a poll by the Chartered Management Institute (CMI) finding the majority of employers believe the cost-of-living crisis has caused stress and anxiety that have affected productivity levels.
  • Many organisations already offer benefits that can support employees’ financial wellbeing, whether as a core benefit or as an added-value service.
  • Providing training to line managers and mental health first aiders can help to normalise money conversations and create a culture where employees feel they can ask for help.

The cost-of-living crisis is putting employees’ financial wellbeing under significant pressure, with the Money and Pension Service’s Debt need survey, published in January 2023, finding that 40% of UK adults would benefit from some financial guidance or debt advice. As money worries can affect other areas of an individual’s health, it is sensible to align workplace financial and mental wellbeing strategies.

Adrian Firth, employee benefits consultant at Mattioli Woods, says: “Everything’s connected. If an employee is struggling with bills, it can affect all aspects of their health and wellbeing. They might feel stressed and anxious; relationships can suffer; and their physical health may worsen if they have to skip meals. Focusing on all areas of an employee’s wellbeing, including their financial wellbeing, can help to prevent this downward spiral.”

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Workplace financial pressures

The Managers voice pulse point poll, run by the Chartered Management Institute (CMI) from 27 October to 1 November 2022, showed that managers are seeing these knock-on effects across their workforces. Three-quarters of managers who believe their teams are concerned about the rising cost of living (95% of all respondents) have seen increasing levels of stress and anxiety among staff.

Of these, 93% say it is affecting productivity levels, with top concerns being more distraction; increased sick leave and less willingness to take on a heavier workload. Anthony Painter, director of policy at the CMI, says: “Financial worries and their effect on mental health are a real and ongoing issue for employees and employers. Employers must do whatever they can to help.”

Financial benefit awareness

Many employers already offer a range of benefits that can help employees. Martin Parish, area director at Aon, says: “Employers haven’t been great at leveraging benefits with a financial wellbeing angle. They should start by looking at what they already offer.”

Many benefits either support an employee’s financial wellbeing or include services that can be used to help them. As examples, pensions and group income protection provide long-term security, while a health cash plan offers more immediate financial relief by picking up everyday health expenses such as dental check-ups and prescriptions.

Adding financial value

Added-value services can also help. These can include discount vouchers, employee assistance programmes (EAPs) and financial education, says Katharine Moxham, spokesperson for industry body Group Risk Development (Grid). “It’s vital that employers keep up-to-date with what’s included on their group risk and healthcare insurances,” she explains. “Some insurers have added financial wellbeing extras in the last few months in response to the cost-of-living crisis.”

Products such as early pay or pay drawdown can also help but Ed Watling, employee benefits consultant (healthcare) at Mattioli Woods, advises caution. “These can help an employee with a one-off financial hit but if someone can’t make ends meet, it just creates a debt cycle that they could struggle to escape,” he explains. “It’s better for employers to look at ways they can help employees take control of their finances. Financial education can be really useful.”

Education programmes

Financial education is available in a variety of different formats. As well as formal programmes that may be run face-to-face or through a webinar, Parish says there are several free resources. “The government’s Moneyhelper and Pension Wise are useful but employers should also look at what’s available on other benefits such as pensions,” he explains.

As well as providing financial education directly to employees, it-s worth training line managers and mental health first aiders to ensure they are comfortable discussing financial matters with staff. The link between mental health and financial worries means it is possible that money worries will be the reason an employee is suffering with stress or anxiety: signposting them to support such as the EAP, debt advice or a welfare fund can help.

Supportive culture

Providing financial benefits and education for employees is great but taboos around finances mean the right culture is essential if employers want to reach everyone who needs help. Alicia Nagar, head of people, wellbeing and equity at MHFA England, explains: “Senior managers must role model to normalise conversations about money. Opening up about money issues helps to create empathy and makes it easier for employees to reach out for help. At MHFA England, we talk about money once a month, sharing tips and any worries we might have.”

Workplace policies can make a difference to the culture, and employees’ finances, too. For instance, home and hybrid working can save commuting costs and enable employees to fit commitments such as childcare around work.

And, while starting a conversation about money is never easy, with the cost-of-living crisis affecting everyone, there has never been a better time to promote financial wellbeing.