How improving financial wellbeing can boost employee mental health
Looming deadlines, tight turnarounds and volatile, uncertain market conditions: all considered common causes of workplace stress.
However, despite being a significant part of the stress equation, those factors aren’t the only things piling pressure on UK employees.
The cost-of-living crisis has shone a spotlight on the often under-discussed link between financial wellbeing and mental health — and studies show the impact can be wide-reaching.
Consequences of financial stress
A financial wellness survey by PWC found that 57% of those asked identified finances as the leading cause of stress in their lives.
Financial stress can trigger panic and anxiety, cause sleep problems, adversely affect personal relationships and hamper work performance.
The knock-on effect for employers can range from absenteeism and presenteeism to high staff turnover, low morale and increased on-the-job accidents.
On the other hand, when employees feel financially secure, they report higher levels of happiness and engagement.
Without money worries weighing heavily on their minds, they can focus better at work and are more productive.
Money talk remains a taboo
While attitudes towards money can vary between generations, most people still see talking openly about personal finances as taboo.
That’s why many people choose to bottle up their money worries rather than ask for help.
Younger people also tend to avoid speaking about money due to a lack of experience. However, this reluctance to ask questions, share experiences, or seek support can leave them financially vulnerable and prone to making expensive mistakes when it comes to borrowing and spending habits.
You need to break this taboo by promoting an open and supportive environment around money.
It all starts with being aware of the different types of financial stress and how to spot them, before encouraging employees to improve their financial literacy via your employee benefits package.
How to spot employee financial stress
Financial stress is defined as having difficulty meeting expenses or worrying about finances.
There are two components to financial stress: It can either be objective (based on facts) or subjective (based on feelings).
Objective financial difficulty occurs when someone simply doesn’t have enough funds to cover their expenses or repay their debts.
Subjective perceptions about financial security are unique to each individual and can vary depending on age, gender, education, or ethnic group. Major life events, such as marriage, having a child, or retirement, can also affect these perceptions.
With this in mind, it can be difficult to pinpoint that someone is suffering from financial stress and the reasons why. However, the signs of financial stress often overlap with indicators of stress and burnout in general.
If you notice an employee has started to display the following traits, you may want to address their financial wellbeing as a priority:
- Increased absenteeism
- Growing agitation and irritability
- Difficulty concentrating and meeting deadlines
- Low morale and productivity
- Anxiety or depression
Studies also show that financial stress disproportionately affects people with lower incomes, with those in the lowest income brackets significantly more likely to experience mental health issues. Regularly reviewing performance, salaries and bonuses can help you identify money worries among staff before they spiral out of control.
Enhancing financial wellbeing via employee benefits
Once you’ve identified financial wellbeing concerns, there are several employee benefits solutions you can provide to improve financial literacy and ease money-related stress and anxiety.
Financial education services can help staff address objective financial concerns with guidance on budgeting and saving. You can also demystify money for younger employees with jargon-free guides explaining complex financial terminology.
Meanwhile, flexible financial security benefits, such as critical illness, income protection, and death in service cover, might help relieve those subjective financial worries. By reassuring your staff that they (and their family) will be looked after should the worst happen, you could lift a perceived financial weight off their shoulders.
Ultimately, improving employee financial literacy can reduce the stigma surrounding money talk. As a result, they’ll feel empowered to seek help rather than let financial stress chip away at their mental health.
With a flexible employee benefits platform like FlexGenius, powered by Avantus, you can support financial wellbeing by offering expert advice to improve financial know-how, calculation tools to help forecast retirement income and products to protect your staff and their dependents.
In partnership with Avantus
Flexible Benefits & Technology specialist providing online, highly configurable platforms to Customers and Intermediaries worldwide.
