Look after your employees and they’ll look after you. It’s a simple concept, but a powerful one. And one of the reasons that wellness in the workplace is now a top priority. For a long time, wellness was defined as the mental and physical health of employees. Both hugely important factors that contribute to an individual’s sense of well-being. But not mutually exclusive. It’s now widely recognized that there are other factors that contribute to an individual’s health, happiness, and productivity at work. And a big one of these is employee financial wellness. Because it’s a relatively new (and often overlooked) player on the field, we’ve decided it was time to put it into the spotlight.
What is financial wellness?
Broadly speaking, financial wellness equates to having peace of mind about personal money matters. Drill down further and key components include the following:
- Control: We all have to make decisions about money almost everyday. Knowing that you’ve applied consideration and thought to those decisions is an important part of financial well-being.
- Security: Life’s full of unexpected events. And most come with a cost implication. Whether it’s a job loss, medical emergency, or major home repair, having money set aside to see you through periods of uncertainty promotes a sense of security and peace of mind.
- Freedom: As well as providing life’s essentials, money should help us meet day-to-day personal goals and match our personal values.
- Planning: Having something to aim for motivates us to save. Making steps to plan for the future is an important part of feeling comfortable with our finances.
Why is financial wellness in the workplace important?
In today’s increasingly commercial world, more people are faced with making difficult financial decisions and coping with stressful financial challenges. But why should this matter to employers? Let’s take a look.
Supports a duty of care
Most businesses acknowledge the significant role they play in their employees’ lives. And they take that responsibility and duty of care seriously. In a report carried out by the UK’s Chartered Institute of Professional Development, 85% of organizations questioned said that they actively promoted financial wellness for employees because it was “the right thing to do.”
Boosts employee engagement
Research indicates that money worries top the list of the most common employee concerns. Offering financial wellness benefits can lead to higher levels of employee engagement because it shows that employers are mindful of this, care about it, and are taking steps to actively help.
Combats an aging workforce
Providing financial wellness tips, advice, and support to older workers means they can better prepare for retirement. This reduces the number of employees who need to keep working simply because they can’t afford to retire. And it opens up the pipeline to new talent.
If you’re worried, it can be hard to focus on the job at hand. Over half of all employees from the aforementioned CIPD survey say that money worries stop them from sleeping well and from performing their best at work. Taking steps to support employee financial wellness leads to raised concentration levels, better creativity and problem solving, and, ultimately, greater output.
Promotes a healthier and more present workforce
Stress, anxiety, and depression are all common side-effects of poor financial wellness. And common reasons for employees taking time off work. Which is why it’s so important to make employee financial wellness an equal partner in your well-being strategy, alongside mental, physical, and emotional wellness.
What does financial wellness in the workplace look like?
When designing an employee financial wellness program it helps to focus on two key areas: What training can I provide? And, what benefits can I offer? Here are some ideas that cover both.
Employee financial wellness training
1. Grow good money habits
Learning how to budget is a great habit to get into. It’s a good way of staying in control. And a good way of freeing up extra cash to do more of what matters. Grow your employees’ financial wellness by giving them the training and tools to design a strong budget plan and learning how to stick to it.
2. Set goals to work towards
Money is a means to an end. Train employees on the importance of setting achievable financial goals so they can realize an ambition or buy something they’ve always wanted. Having motivation and the means to achieve it is a great way to grow employee financial wellness.
3. Get to grips with debt
Debt isn’t all bad. But it can be a major cause of stress if it’s not managed properly. The good news is there are lots of practical techniques you can share with your employees on how to manage debt. This way, you’ll help them reduce stress and boost their sense of financial wellness.
4. Take steps to save
The benefits of saving are obvious. But saving is easier said than done. Sharing some simple saving principles to help employees set aside a sensible and realistic amount each month leads to a sense of security. And is one of the most important financial wellness tips to include in your armory.
5. Learn more about pensions
Contributing to a pension scheme to help with life after work is important. And a key factor that boosts employee financial wellness. But, over the years, the world of pensions has become much more complex and overwhelming. Help employees navigate the different options (state, occupational, personal) and choose a pension plan that’s right for them.
Financial wellness benefits
1. Education and advice
Combine a formal financial wellness training program (see above) with lunch and learn sessions, resources, and access to experts in the field.
Introduce the concept, and demonstrate a company-wide commitment to employee financial wellness at the very start of your employees’ journey with you.
3. Lifestyle support schemes
Provide practical solutions and support (for example, work-from-home or paid time off policies) to help employees meet major expenses such as childcare, travel, or health.
4. Collective buying
Seek out group pricing deals to give employees access to offers, products, and services at a reduced price.
5. One-to-one counseling and referrals
If you’ve got an employee assistance program (EAP) in place to address personal problems that might adversely impact work performance, make sure employee financial wellness is included.
6. Retirement planning
Design an ongoing internal communications awareness campaign around retirement planning and the provision you offer. Include in-depth training sessions which incentivize participation and illustrate the financial wellness benefits of your retirement provision.
10 financial wellness tips
To help you design an effective and engaging employee financial wellness program, we’ve pulled together 10 financial wellness tips to set you on the right track.
- Align employee financial wellness with your DE&I culture to make sure benefits can be customized to cater to different needs.
- Run a survey to help understand employees’ financial wellness needs and then design benefits with those requirements in mind.
- Make sure financial initiatives are part of an ongoing program of offerings and not a one-off event.
- Invest in an education campaign to ensure employees know how to access and use all of the financial benefits you have on offer.
- Encourage a culture of personal financial responsibility and be ready to direct employees to independent, specialist sources of advice where necessary.
- Create a rationale and strategy for supporting employee financial wellness. Set benchmarks, track and evaluate success, and make changes if something’s not working.
- Hook into timely events (births, marriages, house moves) to deliver targeted messaging to different employee segments.
- Cater for everyone. Remember, higher earners can still fall into debt, make bad money choices, and worry about their finances.
- Build a credible network of financial wellness champions to share and signpost advice and resources.
- Define a holistic employee wellness program. Put financial wellness front of stage so it receives the same level of focus and investment as physical, social, and mental health.
The right thing to do
Opening up a well-being strategy to include employee financial wellness is a win-win. It delivers a high value on investment for businesses, boosting productivity, performance, engagement, and retention. But it also delivers valuable returns for employees. By giving them the tools and information they need to control their finances confidently and wisely, they’ll feel happier, more secure, and better prepared for whatever life brings them and their dependents. Which is why we’re with those 85% of organizations that believe that, above everything else, investing in employee financial wellness is simply “the right thing to do.”