What’s happening? New platforms are quickly invading the employee benefits and perks marketplace, changing the way employers are helping their team to manage financial wellbeing.
But what’s all the fuss about?
Physical and mental health have long been top of the agenda when it comes to employee wellbeing. For years, employers have invested big wonga in providing their team with everything from gym discounts to employee assistance programs in a bid to keep members of their team from falling by the wayside.
However, more and more employers are now searching for that secret formula to improve what has previously been dubbed the ‘last taboo’ of the workplace: financial wellbeing.
Financial distress equated to 4% of a company’s bottom line.
So what is ‘financial wellbeing’?
Basically, financial wellbeing is the state of mind you’re in when you feel in control of your financial life. It coincides with financial resilience and the ability to comfortably manage your finances. More specifically, if you are able to manage your finances, you are likely to be satisfied with your ability to save, manage your cost of living, and make your salary last until the end of the month. As we all know, that’s easier said than done!
How can a lack of financial wellbeing influence employee life?
When employees devote mental resources to worrying about money, productivity at work is compromised, absenteeism (and, more worryingly, presenteeism) increase and their own personal relationships are put under strain.
The constant strain of money worries affects an employees’ mental health, impacting both their personal life and their work-life. In extreme cases, it can even affect their IQ! Barclays research shows that if employees have less than three months’ salary savings as a buffer, then they are vulnerable to financial distress.
Why should employers care about improving their employees’ financial wellbeing?
The financial wellbeing of the team is something a responsible employer should incorporate into daily engagement plans. Not only does the man in charge have a certain level of responsibility to care for the wellbeing of the team, empower employees to handle life’s financial ups and downs and to provide them with a better chance of becoming financially resilient, but it also makes business sense.
Internally, by taking that extra step to increase engagement with employees, an employer will bolster relationships with the team and foster an increased sense of loyalty. But it works externally too: a financial wellbeing solution helps to brand a business as more attractive, and can even bring down talent acquisition costs!
And it doesn’t stop there. Financial distress equates to 4% of a company’s bottom line. This is tied to: higher absenteeism, lower productivity, higher potential for fraud and theft, and associated higher staff turnover. As a by-product of ticking that corporate social responsibility box for which employers are already setting aside a budget, they are also addressing the tangible costs of financial distress.
… it really is the golden snitch for employers looking to stand apart from the pack within a given industry.
What can employers actually do to help?
YEmployers should first get to know what’s already out there. There are many providers trying to address financial wellbeing in different ways whether that’s with simple financial education packages or souped-up solutions that truly drive change by helping employees to tighten their grip on their money.
Employers should stay attentive to their employees needs and look out for the tell-tale signs of financial distress whether it manifests in higher staff turnover, lower productivity or higher absenteeism. Shying away from the problem is not a solution!
Factor in a financial wellbeing element to your focus groups and surveys. Financial wellbeing should not be treated as a taboo, and addressing this head-on is going to be key for any employer looking to make a difference while boosting employee engagement and brand loyalty.
Finally, employers should be progressive in the types of tools they bring in, even from a testing standpoint, to see if they can address the gaps in their workforce’s financial wellbeing needs. They need to set success criteria; ask for a trial as well as a testimonial or two. Solutions that are available should not be treated as ‘one size fits all.’
Employers are looking for tangible results and need to be able to answer questions like ‘how can you prove that my employees will become more financially resilient, and ‘is this just a one-time benefit or is this a long-term solution that really addresses my employees financial wellbeing needs?’
On Squirrel.me, a calculator will give you a quick estimate of how much financial distress is really costing your bottom line.