Why every mental wellbeing strategy must include financial wellbeing and how to link the two

A sense of wellbeing is not reliant on a single construct but rather a holistic state. Most things in our lives can be going well, but then suddenly something is out of kilter and that’s it – we’re taken off balance and our sense of wellbeing suffers. And when our wellbeing suffers so does our ability to do our job well.

There’s already a very well-established link between mental wellbeing and productivity levels in the workplace. The World Health Organization estimates that mental health issues cost the global economy about US$1 trillion a year in lost productivity.

Mental health negatively impacts a business’s bottom line whether that’s down to presentism, absenteeism or someone arriving at the office having not slept all night and not able to perform to the best of their abilities.

What is less established however, is the link between financial wellbeing and mental wellbeing. As we all know there are certain events such as the death of a family member, moving to a new house or work stress that can cause mental health issues, but financial worries have a massive impact too.

Our own research found that 3 out of 4 employees are worried that they don’t have savings and 2 out of 3 employees state that money worries negatively affect their mental health. Three out of five employees also recognise that money worries in turn negatively impact their work.

Employees don’t miraculously leave their worries at the office door or in current times, in the kitchen before they log-on! Worries are a distraction, but when it comes to financial worries there’s support that the employer can provide.

Find out what employees are really worrying about

The first step is finding out what financial issues your employees are likely facing. The issues will be different depending on age groups, for instance you would expect that those employees getting closer to retirement are going to start feeling anxious about having enough money in their pension scheme. But for younger employees, pensions are going to be the last thing that is keeping them awake at night.

For younger employees the main issues are most likely going to be about managing debt, creating a budget, starting to save or buying a first house. Our own research found that getting on the housing ladder was one of the biggest concerns for our younger colleagues.

Depending on where you live, a first-time buyer will need a deposit of anywhere between £20,000 and £50,000, and then of course they’ll have all the other costs on top such as stamp duty and legal fees. It’s not easy to get this type of money together and that can be really worrying for youngsters.

Building a support structure

Once you know what is keeping your employees awake at night, you can start thinking about the support that’s needed and can be provided. Clearly financial education is important, but it has to be relevant and delivered in a way that’s simple, easily understood and, perhaps most importantly, leaves the employee feeling empowered. They need to feel like they can take action which, after all, is the first step to dealing with financial worries.

Another important point about financial education is that there is evidence that it works in accordance with Maslow’s Hierarchy of Needs; you shouldn’t just jump into the main subject matter, there needs to be educational “levels”. For instance, an educational piece around getting on the housing ladder is useful, but it’s only of real value if you also address precedent areas such as debt management, budgeting and emergency fund formation.

These are likely to be areas that are barriers to saving a deposit. Although someone might say they’re concerned about saving for a deposit, what they’re really worried about are the things that are stopping them saving.

Make sure you have solutions

When it comes to financial products, research shows that employees rely on guidance from their peers and family but there’s a huge amount of trust with the employer. Solutions provided through the workplace are trusted; after all the employer has chosen to make these available and “they know better”. It’s about confidence.

If I’m already worried about money, it helps if the provider selection process has already been done for me!

Another big positive about the workplace, is the ability for employees to save directly from pay. Salary deductions definitely help with regards to persistency; employees tend to learn to live on what ends up in their bank accounts each month and if there are financial pressures, their more likely to cancel payments coming out of their bank out than their pay.

Raising awareness & accessibility

It’s no good having a fantastic financial wellbeing programme if nobody knows about it. There needs to be plenty of communication around what’s on offer and whether it’s financial education or products, employees need to be able to access these easily and in a way they would in a retail setting.

In other words, digital delivery is crucial. We access and manage everything else through mobile apps so why not financial wellbeing solutions?

Linking financial wellbeing and mental wellbeing

And finally, how do you tie the two together? Well the answer is, they’re already inextricably linked. A sense of financial wellbeing is one of the precursors to good mental health. And so, all you need to do is make sure that your wellbeing programme is holistic; it needs to include all the elements that keep me on the financial “straight and narrow”.

The author is Steve Watson, head of proposition at Cushon.

This article is provided by Cushon.