There is increasing evidence that financial anxiety impacts mental, physical and social wellbeing. This, in turn, impacts attendance and performance at work.
With stagnant wages, increased life expectancy, and an uncertain economy and job prospects, according to PWC’s Employee financial wellness survey, published in April 2015, about a third of us are worried about money. Barclays’ Financial wellbeing: The last taboo in the workplace report, published in May 2014, also found that 70% of employees are in, or close to, financial trouble.
Helping employees get financially fit is a win-win for employees and employers. The Social Markets Foundation’s January 2016 research, How employers can improve the wellbeing and productivity of their workforce, estimates that financial stress causes the economy £26bn and almost 10 million working days each year.
As employees already engage with money in the workplace through pay and pensions, employers have a unique opportunity to help. There will be scepticism about sharing too much, but the majority of employees welcome the opportunity to receive financial guidance from their employer.
As always, one size does not fit all, so understanding the employee population is paramount. The key areas are firstly, support: promoting and linking to resources such as employee assistance programmes, Citizens Advice, Money Advice Service or online tools.
Second, education: offered by third parties covering budgeting, cash flow, debt management, understanding credit reports, financial terms and products.
Third, access: providing financial benefits such as employee discount or travel-to-work schemes, group discounts on financial products or partnering with organisations that offer loans with payroll deductions.
Finally, planning: helping employees look beyond the here and now towards school or university savings plans, insurance, investments, pensions and inheritance tax planning through affiliations with financial advisors.
Helping employees improve basic money management skills, reduce high-interest debt, become secure and save for retirement is a win for the employer too. Employee engagement and perceived work-life balance are enhanced, absence reduces, and performance and productivity improves.
Julia Hanna is director at Verditer