How financial wellness can improve employees' physical and mental wellbeing
Supporting employees’ financial wellbeing certainly makes sense. Money concerns can affect much more than an employee’s bank balance, leading to both mental and physical health problems.
Bad for your health
Mental health problems are a common by-product of money concerns such as worrying about paying the bills or feeding the family. Just being in debt can cause anxiety, stress and worries about the future, according to mental health charity Mind.
Financial stresses and strains can also affect relationships, with knock-on effects for someone’s mental health. For instance, a 2018 poll by legal firm Slater and Gordon found that financial issues were the top cause of marital breakdown, with rows about money potentially leading to one in 10 married couples splitting up that year.
Physical health is also at risk when you’re struggling to make ends meet. A few broken nights' sleep can soon manifest themselves in physical health problems, with the NHS listing everything from bad moods and poor focus through to serious conditions such as obesity, heart disease and diabetes as unwanted side-effects of a lack of shut eye.
As well as affecting sleep, a lack of cash can also lead to a poor diet. When money's tight, it can be difficult to afford to eat properly with junk foods providing a much cheaper way to get the necessary calories than fruit and veg. Again, this can be a one-way ticket to serious health problems including heart disease, cancer and depression.
Good for your wealth
Introducing a financial wellbeing programme can help to address these health issues. By giving employees access to a range of carefully curated products, tools and education, they’ll be able to take the necessary steps to help to master money management and take control of their finances.
From a business perspective, it’s a smart move. As well as helping to reduce the productivity, absence and staff turnover issues associated with mental and physical health problems, offering employees this support could win you some serious brownie points.
The transition from commission to fees has made independent financial advice a less accessible service for some. With that avenue potentially closed to all but those with larger pension pots or the means and appetite to pay fees, the workplace becomes the ideal conduit for financial education.
But before you rush out to find something shiny and new with financial wellbeing splashed all over it, think about what you’r trying to achieve. Although the drive to offer financial wellbeing can feel like a new frontier for employee benefits, I’d argue that it’s nothing new.
A new frontier?
Certainly, some elements, such as debt management services and access to workplace ISAs and other savings vehicles, are new benefits but employers have been providing support with financial wellbeing for many years.
Benefits such as pensions, life insurance, health and medical benefits, access to discounts portals and subsidised gym membership all contribute to an employee's financial wellbeing. Even the fact you pay them at the end of every week or month is fundamental to their financial health.
What is new is the way it's packaged. Bringing together financial education, tools and related products under a financial wellbeing banner can make it easier for employees to find the information and support they need.
As financial wellbeing can mean so many different things, employers need to think about their strategy and the support they would like to offer to employees. For instance, some of the financial wellbeing services are product heavy, so consider whether these fit with your existing range of benefits and your overall strategy.
Neither is it always necessary to invest in new products at all. Many existing benefits have a financial wellbeing angle or tools to help employees improve their financial position. As examples, pensions can include tools to help employees understand how much they need to save, and employee assistance programmes can offer financial wellbeing support.
Reengineering these existing benefits could provide the financial wellbeing support that's required, without causing the stresses of having to find new budget.
The author is Martin Parish, head of pension consulting at Aon Employee Benefits.
This article is provided by Aon Employee Benefits.
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