Financial wellbeing – how support positively impacts your business
Financial wellbeing is an individual’s current and perceived financial state, and has been shown to have a huge effect on emotional wellbeing and workplace anxiety. A recent study involving over 3,000 workers across a range of ages, positions and incomes, has uncovered an increasing pattern of financial anxiety. This anxiety comes at the price of not only employee health and wellbeing, it could also cost you your business.1
On average, people spend 13 hours a month worrying about money whilst at work.2 56% admit feeling that financial anxieties impact their job performance, while 54% say that it also impacts their relationships with colleagues.3
So what’s the answer? How can you empower your employees with greater confidence in their financial security and increase their financial wellbeing?
What causes financial anxiety?
You might assume that the amount of income is the culprit. However, low financial wellness and household income are not directly linked. In fact, 14% of those with the lowest financial wellness scores, earn over $100,000 (around £70,000). 4
Research suggests that the top financial concern among employees is ‘just keeping up with monthly expenses’. Meanwhile ‘credit card debt’ and ‘saving for retirement’ were also named as key concerns5 and not just among older employees. 45% of employees aged between 18 and 34 admitted to being concerned about their pension savings6, with Pension Freedom making the decision about how to use pension pots more complex than ever.
Specific anxieties vary widely. So it’s important to find a solution that will impact the workforce as a whole.
‘Knowledge is power’: how your workforce could benefit from financial education
Financial literacy is the ability to manage finances effectively for long-term financial security.7 Research has found that 67% of the population are financially illiterate.8 However, the Open University has revealed that 81% of employees would value some form of financial education.9 This high level of demand indicates a very real need for help. A lack of education could result in many trying to learn financial skills on their own. But without professional guidance, this may cause more stress and confusion. Employees who make risky uneducated decisions are doing themselves more harm than good.
Educating your staff through financial education programmes is a great way of improving financial wellness.
You may think of financial education as an expensive ‘nice to have’. But, compared to the amount spent on vocational training it can be an equally good solution to improve employee performance.
These are just some of the key issues that could be resolved through improved financial confidence:
- Employee absenteeism
Employees who suffer financial stress are far more likely to incur costs for absenteeism.10
- Staff turnover
According to the Consumer Finance Protection Bureau (CFPB), stresses about money and financial wellness could be responsible for 40% of employee turnover.11
Research by the University of Warwick shows that happy employees are 12% more productive. 12
Financial education and retirement planning programmes can provide your employees with the confidence they need to successfully manage their finances. By engaging your employees in these programmes, you will be making a long-term investment in your workforce.
Supporting employees through financial education
There are a wide range of financial education programmes and resources available to help you meet the needs of your business and your employees. These programmes can be held at your place of work, at an independent education centre, or even online.
Some of the resource options available:
- Consultancy: Working with you to build personalised solutions for your business and your workforce. Creating a long-term education strategy to improve the financial literacy of your employees.
- Workshops: Choose from a range of modules designed to meet the specific needs of your employees. Face-to-face workshops can be designed to provide your employees with the tools and knowledge to plan effectively at any stage of their career.
- E-learning: Online resources and learning packages aim to provide an interactive and enjoyable learning space. This allows your employees to learn at their own pace, offering support they can return to again and again.
The benefits of financial education are clear, helping to look after your employees lives outside of work, means they will have fewer distractions in work. Providing your employees with the tools and knowledge to plan effectively for the future can have a positive impact on their lives and your business.