Supporting employee financial wellbeing
We are firmly in the midst of a cost-of-living crisis, with household budgets being squeezed week on week. Inevitably, this financial uncertainty is having a negative impact on employee mental health, wellbeing and performance at work. So, what can you do to support your employees, who may be concerned about their household budgets?
What is financial wellbeing?
The Money and Pensions Services (MaPS) defines financial wellbeing as “feeling secure and in control of your finances, both now and in the future. It’s knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future. People who experience financial wellbeing are less stressed about money, which, in turn, has positive effects on their overall mental and physical health, and relationships.”
Alarmingly, the Chartered Institute of Personnel and Development (CIPD) reports that “one in four employees say money worries affect their ability to do their job – and those on the highest incomes are not immune. Even before the soaring cost of living started to make the headlines, one in eight workers in the UK already lived in poverty. Now, many more are likely to be struggling to maintain a decent standard of living.”
How might employee financial wellbeing be affecting your business?
The CIPD’s survey 'Financial Wellbeing: The employee view', found that:
9% of respondents are losing sleep at night because they are worried about money. That translates into a negative impact on their ability to concentrate at work and their productivity.
30% are also making uninformed financial decisions – they say they don’t use advice or information from any source when weighing up options about saving or spending.
58% face barriers to managing their finances, including lack of time, difficulty in understanding financial products and services, only earning enough each month to get by and the hassle involved in taking action to save money by researching products and services.
Impact on wellbeing and absence
Insecurities and concerns relating to financial wellbeing can impact employee health outcomes and lead to a dysregulated production of the stress hormone cortisol. In extreme cases it can become a vicious circle between financial and wider wellbeing. Employees experiencing financial stress are more prone to be absent from work due to emotional exhaustion or stress-related illness, which may then have an impact on their ability to earn a living.
Impact on employee performance
Financial stress impacts many areas of our lives, so it’s no surprise that employees often bring these issues to work. This can lead to employees either using work time to deal with financial matters or spending time and energy worrying about money while performing work activities, which can have a significant impact on productivity.
How can you positively support your employees?
Many businesses are not giving financial wellbeing the attention it deserves. A recent CIPD survey of employers found that “the main focus of wellbeing strategies is mental wellbeing. Financial wellbeing is the least common area: among employers with health and wellbeing strategies, only 11% actively focus on financial wellbeing, compared with 57% that actively focus on mental wellbeing. However, financial distress has important implications for both wider employee wellbeing and performance. It’s a relatively common phenomenon that has worsened during the COVID-19 pandemic, and is something that employers can help address (and not only by increasing salaries). In short, there is plenty of good research evidence to show that financial wellbeing is an important aspect of HR strategy.”
Those businesses demonstrating a commitment to supporting employee financial wellbeing, by adopting a comprehensive business healthcare solution for example, are seeing a positive impact on levels of absenteeism, stress, job performance, mental health, decision making and focus within their business.
Employee financial wellbeing: A positive action plan for your business
Financial wellbeing is both a workplace issue and a societal challenge. Here are some examples of ways you can help your employees, with further solutions outlined in our comprehensive Financial Wellbeing Guide for Business:
Integrate a financial wellbeing strategy into your wider business health and wellbeing strategy.
Use the link with general mental wellbeing, exhaustion, sickness absence, presenteeism and productivity to make the case for and promote a financial wellbeing strategy.
The COVID-19 pandemic has led to worse financial wellbeing for many. Now is the time to increase your focus on this important issue.
Financial wellbeing can in principle affect anyone, but look out for those in manual, junior or less skilled jobs.
Talk about financial wellbeing regularly across a range of channels to promote available support and encourage open discussion about financial issues.
Assess employee financial wellbeing, using tried and tested measures, to inform and prioritise action.
Free download - Benenden Health’s Financial Wellbeing Guide for Business
Following on from the comprehensive financial wellbeing data report released by CIPD, Benenden Health has created a Financial Wellbeing Guide for Business. Written for managers, business owners, business leaders and HR professionals, the Financial Wellbeing Guide for Business is designed to cut through the statistics and actively help you to manage financial wellbeing concerns in the workplace. The guide covers the following key areas in more detail:
What is financial wellbeing?
How does it affect employees at different life stages?
How does it affect your business?
How can you support your employees?
Adopting a business healthcare solution to help
Our business healthcare
Benenden Healthcare for Business provides an affordable, high quality, private healthcare solution to support all your employees. With easy setup and no exclusions on pre-existing medical conditions, we want to help make healthcare a standard of employment for everyone, rather than just a perk for the few. See how we can help you develop a healthcare solution that works for your whole business.