Employee Financial Wellbeing in the Workplace
Employers are increasingly recognising the close relationship between employee wellbeing and employee productivity. Put simply, a happy employee is a more productive employee.
An employee’s mental and physical health contribute significantly to their overall wellbeing. As a result, more employers offer employee benefit packages with a specific focus on physical and mental health.
Financial wellbeing is often not considered within this overall package. Research is showing that successful wellbeing programmes must have an understanding of the importance of financial concerns. Specifically, how these financial concerns can affect an employee’s mental and physical health.
Why Employee Financial Wellbeing Matters
Financial concerns can be one of the biggest sources of stress in our lives. In turn, this can impact an employee’s performance in the workplace.
Research carried out by CIPD showed evidence “that shows poor financial well-being impacts on health in terms of poor psychological well-being, higher stress and anxiety levels, and lower levels of good health.”
Throughout the research, YouGov surveyed 1,817 working adults, across all industrial sectors. The object was to identify why employee financial wellbeing matters. The survey found that:
- 75% of participants believed earning a wage that supported a reasonable lifestyle was an important aspect of financial wellbeing.
- 55% of participants believed the ability to save for the future was an important aspect of financial wellbeing.
- 54% of participants believed being rewarded for their efforts fairly, and consistently was an important aspect of financial wellbeing.
- 45% of participants believed being able to comfortably pay off their debts was an important aspect of financial wellbeing.
How Can Employee Financial Wellbeing Impact A Business?
It’s easy to understand why financial wellbeing matters to the individual employee. But from a business perspective, it’s less understood.
However, employee financial wellbeing should be as important for the business as it is for their employees. Poor financial wellbeing can impact overall worker productivity. Through their research, CIPD identified:
- 1 in 4 workers reported that financial concerns impacted their ability to do their job
- 1 in 10 workers reported they struggled to concentrate or make decisions at work due to financial worries
- 19% of workers reported losing sleep due to worrying about money
At the end of the day, these repercussions have a direct impact on a business. Put simply, a stressed, tired employee is not going to be as productive as they could be.
How Businesses Can Support Employee Financial Wellbeing
In March 2016, the Financial Advice Working Group (FAWG) looked into how employers can support their employees financial wellbeing. Throughout their research, they found that most employers want to help their employees. The problem is, they need guidance on how they can help.
Here are 5 ways to support your employees financial wellbeing:
- Money Management Advice – 1 in 5 employees noted they would value financial guidance or debt management counselling, according to PwC’s 2017 ‘Employee financial wellness survey’.
- Employee Discount Schemes – Employers can register for a variety of rewards and loyalty schemes. These allow employees to enjoy discounts on goods and services. Here are 10 Employee Benefits Schemes to consider.
- Salary Sacrifice Schemes – A salary sacrifice scheme is a great way to provide tax-friendly benefits to your employees. Pension, childcare, cycle-to-work and ultra low-emission car schemes are all eligible for a salary sacrifice scheme.
- Pensions – Many employees in the UK meet the requirements to be automatically enrolled in a workplace pension. However, you as the employer can help stand out from the crowd. Rather than the mandated minimum contribution each month, consider offering higher employer pension contributions.
- Workplace Investment Schemes – Research by the Social Market Foundation and Neyber has shown that 1 in 3 employees do not have any savings or investments. Workplace investment schemes can offer employees a tax efficient, easier way to help save or invest their money.
Looking after the financial wellbeing of your employees can help create a happier workplace. The first step is for employers to improve their understanding of their employees. A deeper understanding of the employee experience can help an employer provide a more positive workplace.
The hug platform can help you gain further insights into the wellbeing of your employees. At hug, we want you to gain critical insights on your workforce and use hug data to measure the impact of products and services you offer employees. If you’d like to see how the hug platform can help you understand your workforce, request your demo today. Click here to get started.