Why encouraging employees to talk about financial wellbeing is so important
When you discuss an employee’s performance and their lack of focus, have you considered what is praying on their mind? What’s changed your once enthusiastic, engaged employee to become distracted, frustrated and unfocused? The answer could be down to financial wellbeing.
The sad reality is, 94% of employees are consumed by money worries. Figures from the TUC show average household debt in the UK stands at a record £15,400, while Neyber found in its DNA of Financial Wellbeing (2018) research that the chief concern for 30% of employees is financial worry.
The situation is a serious one, but is it a personal matter? Why should businesses care about employee financial wellbeing? How do financial worries impact a business’ bottom line and how can we encourage employees to open up and talk about financial wellbeing at work?
Before we go on to explore how businesses can encourage employees to open up and talk about financial wellbeing, we’ll first look at what financial wellbeing is, as well as how worries over financial wellbeing can impact employee engagement, morale and productivity.
What is financial wellbeing?
A lot is said of emotional wellbeing, but financial wellbeing is just as crucial and is a topic that should be more openly discussed.
In its simplest form, financial wellbeing is a sense of security, comfort and confidence that you have enough money at your disposal to stay afloat and meet your individual needs. Good financial wellbeing means you feel you are in control of your finances while having the financial freedom to enjoy life. Poor financial wellbeing can have a direct impact on your private relationships, your workplace relationships and your mental state.
Poor financial wellbeing can arise as a result of:
- unmanageable debt
- uncertainty that you can cover basic expenses
- insufficient or unstable income
- no budget or financial planning
- a lack of savings.
Why should you encourage employees to discuss financial wellbeing at work?
Money worries aren’t just an individual employee concern – they have a direct bearing on company performance and productivity. Our Financial Wellbeing Index (2019) shows that, when an employee is preoccupied with financial concerns, their productivity declines. CIPD research conducted in partnership with Close Brothers, found that one in four employees claim financial difficulties are impacting their ability to do their job, with one in 10 saying they find it hard to concentrate and make decisions at work because of money worries.
Issues with financial wellbeing can also cause a deterioration in mental health, leading to increases in anxiety, illness and absenteeism.
When employees are suffering financially, they begin to question their decisions in life – including their position at your company. They might begin to feel undervalued, stressed, distracted and hopeless. Feelings like this can leave employees feeling unmotivated and disengaged, which will more than likely prompt them to shop around for competitors who can provide a more enticing rewards package.
When you really drill into it, financial issues are a major distraction and one that businesses can take steps to combat. Below, we’ll cover how to encourage employees to address and open up about financial wellbeing at work.
Show employees you’re serious about their financial future
Financial wellbeing isn’t a tick box exercise; it’s not something you can discuss once, pay lip service to or ignore. If your organisation is serious about opening up a discussion regarding financial wellness, you need to start by showing your employees you take financial wellbeing seriously. This will require a significant organisational change – but it will pay dividends in the future.
Rather than simply asking employees about their financial concerns, take concrete steps to help all of your employees. Consider carrying out a financial health check to diagnose where the problems lie within your workforce, enabling you to implement a tailored financial education programme that truly tackles employee need.
By showing a duty of care, your employees will feel valued and make the very most of the benefits package available to them, which will encourage people to talk more openly about their financial future.
Financial wellbeing isn't a one-stop solution
Every company is different. They have their own values, their own traditions and a unique culture. Similarly, each organisation is filled with individuals, with distinct needs, concerns and challenges. When implementing a financial wellbeing strategy, this is something that needs to be kept in mind. There is no sense in introducing a one-stop solution. People learn in different ways and a solution needs to recognise this, ensuring employees are heard and understood.
Money worries change throughout life
When employees are younger, they might be stressed over getting on the housing ladder, or repaying their mortgage. Older employees might be concerned about having enough to get by in retirement, or caring for elderly parents. This is something employers should be sensitive about and aware of, ensuring any financial wellbeing programme recognises all of these employee segments and needs.
Create multi-channel communications to discuss financial wellbeing at work
When discussing how to encourage employees to open up about financial wellbeing, we have to consider the communication channels they have open to them.
The more channels you provide to your employees, the more likely they are to find a method of communication that works for them. It’s all about making your employees feel comfortable. Communication channels should include:
- face-to-face support
- online financial education
- Telephone helpline
- access to guidance or advice if they need it.
Empower your employees
Your employees might be holding back from discussing financial wellbeing at work because they’re unsure how doing so would benefit them. With the right financial wellness plan, your employees will understand that by speaking up and asking for help, they’re empowering themselves with the tools they need to make the most of their financial future.
It’s all about education, guidance and advice. Help your employees to take action. Make the whole process cyclical – take feedback on board and monitor it, so you can assess the financial wellness programme’s impact on employee wellbeing. This will help you to understand what works, what doesn’t and why.
Be sure to regularly communicate the benefits of the programme through personalised communication. Show employees how the scheme can help them gain control over their finances while simplifying issues such as pensions, savings and investments. In time, employees will feel confident speaking up and asking questions, which will allow you to help them address and set financial wellness goals and targets.
Financial wellbeing for employees is no longer a luxury for organisations – it's the third pillar of a holistic wellbeing package and a necessity in order to remain competitive.
This article is provided by Close Brothers.
Read the next article
- Benefits Technology
- Bonus & Pay
- Business mobility
- Company Cars
- Employee Engagement
- Employee Share Plans
- Financial Wellness
- Flexible Benefits
- For SME employers
- Future Predictions
- Group Risk Insurance
- Health & Wellbeing Sponsored by Aviva
- International Benefits Sponsored by Zurich
- Responsible Reward
- Reward/benefits strategy
- Staff Motivation
- Tax Efficient Benefits
- Total Reward
- Voluntary Benefits
- Workplace Pensions
- Workforce Demographics
- Research reports
- REBA news round-up
- REBA professional members
- REBA news
- REBA training
Sign up for REBA Professional Membership and join our community
Professional Membership benefits include receiving the REBA regular email alert, gaining access to free research and free opportunities to attend specialist conferences.
Professional Membership is currently complimentary for qualifying reward and benefits practitioners.Join REBA today