Updated: Dec 15, 2022
Financial wellbeing hasn’t just become important in the workplace, it is a deciding factor for many job searchers in today’s job market. And as many countries enter economic uncertainty with prices rising beyond affordable, more must be done by leaders to retain talented employees.
That’s because employees facing financial instability also face poor health and wellbeing. There’s a strong link between health, wealth and happiness, and this is something we’re going to explore in more detail in this article.
COVID-19 and the ‘Great Resignation’ stung businesses in the last quarter of 2021, offering a glimpse into the potential hurdles that we’re now seeing unfold. And in these present circumstances, how can leaders best support the financial wellbeing of their team?
In this article, we’re looking at the shocking truths around financial wellbeing, and what the consequences are for both your business and team. We’ll also explore ways to support wellbeing in the workplace for every employee — and why, without a solid financial wellbeing strategy, your team’s job satisfaction, wellbeing and general happiness is at stake!
Surprising financial wellbeing truths
Before we jump into the different ways to adopt financial wellbeing in your company culture, it’s important to understand the scale at which people suffer and stress with financial wellbeing both in our professional and personal lives. Only then, as leaders, can we recognise the severity of the issue and put in solutions to prevent financial turmoil for employees.
Men are more likely to receive a pay rise than women
It is no secret that men earn more than women, and in most cases, unfairly. The workplace of today demands better remuneration for women, and recent statistics suggest more must be done.
As reported by the Guardian, a YouGov survey of 16,000+ adults found that despite 40% of workers who asked for a pay rise, only around a quarter are successful. That isn’t all, with just 21% of women receiving a pay rise, in comparison to 31% of men who reported salary increases.
This data of nearly 16,000 workers reveals the ugly truth of the failing gender pay gap. If leaders are to correct financial wellbeing in the workplace, they must consider all potential issues, including the difference in pay between men and women.
45% of UK adults don’t feel confident managing their money day-to-day
In 2021, the Money and Pensions Financial Wellbeing Survey revealed the shocking truth about money worries. As it turns out, 1 in 2 adults does not feel confident managing their finances on a day-to-day basis.
Unfortunately, employee financial worries can seep into workplace performance and productivity. The last thing leaders want are employees who turn up, without the mindset and ability to work at their best - also known as ‘presenteeism’
This is due to a lack of tools and know-how. Leaders must provide impartial financial education, and in some cases financial support for employees.
With so much readily available online, including affordable courses on platforms like Udemy, there is no reason leaders can’t do more. In some instances, employers have been known to support employees with tuition reimbursement plans.
Mental Health and Financial wellbeing are linked
Understanding the importance of financial wellbeing starts by recognising the link it has with poor mental health.
As it turns out, people who suffer from poor financial wellbeing are 5.3x more likely to suffer from a form of depression - feeling unable to carry on with the demands of daily life. Not only that, but those with poor financial health are also 3.6x more likely to suffer from a form of anxiety.
Clearly, by supporting better financial wellbeing, leaders can support better overall wellbeing, especially mental health. The figures above demonstrate the close relationship between wellbeing and positive financial health. More needs to be done to highlight this link and further support employees in the workplace.
As the UK faces a recession, leaders must get creative in their approach to supporting financial wellbeing and mental health. Some ideas include regular 1-2-1 meetings. This way, managers can discuss the topic of health, wealth and happiness, and gauge how employees are really feeling.
Alternatively, companies should consider surveys and feedback from employees. It’s about asking the right questions, getting the right answers and taking action. Speak to your team and find out if they think your organisation offers enough financial wellbeing support.
If leaders don’t take the financial wellbeing of their employees seriously, they are neglecting the wellbeing of their people too. It’s as simple as that. According to Money and Mental Health, around half of people in ‘problem debt’ (or 46%) also suffer from a mental health problem.
Money and Mental Health also reported their findings from another survey, which states that 72% of respondents said their “mental health problems had made their money situation worse”.
It’s clear there’s a connection between poor mental health and financial problems. It almost seems like one can create the other, and when people struggle with both, these problems deteriorate even quicker.
How to support financial wellbeing in the workplace
Now let’s turn our attention to supporting financial wellbeing in the workplace, and what exactly leaders can do to help employees.
Ensure all employees are fairly compensated for their hard work
It goes without saying, employees must be paid fairly. This isn’t just for the sake of fairness and supporting financial wellbeing in the workplace. It’s much bigger than that. Failure to provide fair compensation for the hard work your team carries out will see them fleeing their roles for better-paid work.
Regardless of whether your employees adore your leadership style, feel heard and appreciated and enjoy their role, bills and financial struggle outdo these tenfold. If you aren’t already, assess employee salaries by industry levels. Understand if you are fairly paying them - it’s the biggest difference you can make.
Provide financial education and coaching
Better financial wellbeing also starts with learning and education. In fact, getting better at anything starts with education and learning. Have your HR team carry out some research into learning platforms like Udemy and Heka’s employee benefits platform.
These kinds of resources create affordable solutions for education and support when it comes to financial wellbeing and employee health and happiness.
Remember: it’s your duty as a leader to bring financial wellbeing into your workplace, and these three can help tremendously.
Understand financial wellbeing support has to be personalized
What’s one thing about financial wellbeing that many leaders and HR teams fail to realize? It has to be personalized for each employee. Gone are the days of providing generic financial wellbeing benefits in the hope that some employees may use them.
Employees aren’t calling out for high-street vouchers to cut the cost of buying new household goods. Instead, they’re seeking out courses on investing, apps for budgeting and saving more, and general financial advice.
What can you do? And what can you avoid doing to fall into the trap of failed financial wellbeing support?
Final thoughts on financial wellbeing in the workplace
As we’ve learnt, financial wellbeing in the workplace is an absolute necessity for employee retention, job satisfaction and even overall business success. While this article scratches the surface of both reasons and solutions for financial wellbeing, it should act as a starting point to deeper learning, better understanding and more output from leaders.
Only then can leaders rethink their staff wellbeing framework and build healthier, happier teams.
Credit: Alex Hind is the CEO & Co-founder of the employee wellbeing platform Heka. Built with the purpose of providing thousands of wellbeing experiences to employers around the UK.