Let's talk money - the importance of employee financial wellbeing
For Talk Money week we thought we would discuss the importance of employee financial wellbeing.
We cover what you can do, as an employer, to help improve and maintain this within a workforce. Very often the idea of financial wellbeing falls by the wayside. CIPD states,
“There is a growing recognition that wellness is holistic and co-dependent; physical, emotional and financial health work together, and if one part is missing, this imbalance may also impact the other two.”
So, what is financial wellbeing?
It’s a highly personal state, not fully described by objective financial measures. Well-being is defined as having financial security and financial freedom of choice, in the present and in the future- Consumer Finance. Previously Financial wellbeing has been seen as a standalone issue, when in reality it should slot into the overall wellbeing strategy of a business.
How does it affect my business?
Neyber said in 2016 that 17.5 million hours were lost due to absence from financial stress. Evidence shows that poor financial wellbeing impacts on health, productivity and job performance. In 2014, Barclays said ‘For every £1m an organisation spends on payroll, it is estimated it loses 4% of productivity due to poor employee financial wellbeing’. If we do not deal with financial wellbeing and manage it sufficiently, it could be costing a business a lot of time and money.
Why now?
The importance of financial wellbeing has come into play over the last few years due to the ever changing economy. The increase in housing prices and education fees are just are some examples of factors affecting a workforce. It is important to understand that having a financial wellbeing strategy does not simply mean increasing salaries. It is a combination of educating, supporting and guiding your team so they are knowledgeable on managing their finances.
What are the benefits to supporting financial wellbeing?
Financial wellbeing is just as important as emotional and physical. Supporting financial wellbeing will lead to less time taken off work due to financial stress, increased productivity and better mental health.
What can i do to help improve my employees financial wellbeing?
There are many ways you can help to improve this within your team, below are a few examples:
Sick Pay
Do you offer a sick pay scheme? This will take pressure away from those who need time off work for legitimate medical reasons.Pension
The auto-enrolment rule makes it compulsory for those eligible to be part of a workplace pension scheme. This, however, does not necessarily mean it is the most beneficial or effective scheme available. Taking time to research workplace pension providers and reassessing your contribution is another way in which you can support the future of your employees’ financial wellbeing.Educate
Why not offer workshops, talks and good resources on finance and money? This will help educate and increase the knowledge surrounding the subject. Make it known if someone is available to give advice. Consider offering advise on pensions, debt management and other money management issues.Choice in rewards
Different rewards will benefit different people. Teaming up with other businesses is a great way to include a variety of options.
There are a variety of great resources out there which help to improve the Financial Wellbeing of your team. Here at summ.it we are big believers in focusing on the wellbeing of individuals and also offer a wellness service where we can help improve your strategy too.
References
https://www.cipd.co.uk/knowledge/culture/well-being/employee-financial-well-being
https://files.consumerfinance.gov/f/201501_cfpb_digest_financial-well-being.pdf
