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31 May 2022

How to strengthen the employer-employee connection through financial empowerment

Globally, people are worried about their financial situation. But many lack the education to make the most of their finances. Employers can change that

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Global conflict, inflation and the rising cost of living have weakened trust in financial institutions, while also causing a disconnect between employers and employees. As a result, the world of work is at a tipping point. New research asked 6,750 full-time employees across 14 countries* to dig deep into their feelings about their financial wellbeing and the connection this has to their workplace.  Here’s a first look into what was found:

Financial anxiety is widespread and severe

Globally, people are worried about their financial situation. And who can blame them? Inflation and stress on supply chains are driving costs through the roof and wages aren’t keeping pace. The global cost of living crisis isn’t going away any time soon – 37% of earners around the world are struggling financially, living month to month. And it’s not just that anxiety about money is high, it’s that it’s increasing - 70% of people globally feel anxious about their financial situation, that's a staggering 55% year-on-year increase in less than 12 months. 

The research also highlighted how women are underserved by financial education and less likely to feel hopeful about the future. 

Employer-employee short-circuit  

The research highlights that many employees feel disconnected with their employer. Specifically, more than half of all workers believe their companies view employees as interchangeable and replaceable. This is a problem for businesses because these feelings of disconnection can contribute to dissatisfaction, less productivity and more employee turnover. And no one wants to lose their top performers as they’re hard and expensive to replace.

The research shows that young people have the weakest connection with their employers. But you can re-build connections with your rising talent through diverse benefits, specifically financial education.

People desire a connection

In fact, 77% of employees agree that they want to work at an organisation where they feel connected to the purpose and the people.

Globally, while nearly half of employees say they work exclusively for the pay, only one-third say their relationship to an employer is entirely transactional. This suggests a gulf between the kind of relationship people want with employers and their actual relationships. In other words, people don’t just work for the money, they desire a connection with their employers. However, many workers aren’t getting it.

Eroding trust in financial institutions

A combination of macroeconomic factors and global instability has resulted in workers being particularly worried about the future. These concerns strike to the core, as 34% of the people we surveyed said global instability has decreased their trust in financial institutions, such as banks.

People want, and expect, financial education

Against this backdrop of inflation, distrust of institutions, poor financial education and increased financial anxiety, people need and want more support. Relatively few employers offer to help people improve their financial knowledge with benefits like financial education. But the research suggests that there is a hunger for this kind of support – and an openness to receiving it. 

By helping employees improve their financial health at a time when they need it most builds trust and understanding of their financial situation – 56% of people say financial benefits would make them more committed to their employer. The report outlines how young people trust their organisation more if they have these benefits. 

With financial empowerment, employers help their staff take control of their money and achieve financial goals.

Individuals can’t control macroeconomic factors that cause financial and emotional stress. But with financial education and effective communications about employee benefits, employers can help their employees to learn how to control those things that are within their power: economising, growing money through investment and increasing savings.

Globally, employees who receive financial education feel 24% more connected to their employers than those whose employers do not offer such benefits. Even more, employees that receive financial education benefits trust their employers 23% more than those whose employers do not offer financial education.

Read the report to understand how to financially empower your people.

*Ensuring representation across age, gender, ethnicity and earnings. 25% of those surveyed earned the equivalent of more than US$50,000.

In partnership with Nudge

A leading financial wellbeing benefit using behavioural science & technology to help employees.

Contact us today