Employee finances are like their health – private and ultimately their own responsibility – but have all kinds of links and relationships with work and the workplace.
One in five employees say that worrying about their finances affects their performance at work. This is according to a survey by Barclays of people working at 100 companies. Another finding is that 70% of employers believe their employees feel the organisation is concerned about their financial wellbeing — compared to 10% of employees.
Add to this that 38% of employees say they would move to a company which made financial wellbeing a priority, and suddenly ‘financial wellbeing’ – something that seemed like jargon – becomes of very real importance.
In a nutshell, staff with strong financial wellbeing are more productive and less likely to leave. Financial worries can be linked to other areas of wellbeing, like someone’s mental health or their career path. We look at ways to help people manage both their finances, and the worries that they have about them — it’s not all about paying them more!
Barclays defines financial wellbeing as ‘Being and feeling financially healthy and secure, today and for the future’. In fact, they found that it tends to be savings, not income, which determine a person’s financial wellbeing. This includes having a ‘savings buffer’ — a pot of money set aside for unforeseen outgoings — and the ability to save money regularly.
So what are employers to do? Many firms already offer benefits that can help their workers’ money go further, like childcare vouchers. There are even some schemes available to make it easier save, such as workplace ISAs.
The starting point for most businesses is to help their staff understand what their options are. Add in some sound, independent advice, and you enable them to make healthy choices — for their bank balances, and their peace of mind. Financial education needs to be made relevant to the different elements of the workforce demographic, around age or career stages – as illustrated by a PWC survey of American workers. This found that Generation Y employees, (aged 22-34 in 2016), appear more concerned about ‘current expenses’, whereas Baby Boomers (aged 56-73) and Generation X (aged 35-55) also frequently cite ‘retiring’ as one of their top financial concerns.
PWC’s report also contained a stark statistic about the impact of financial wellbeing on productivity: 37% of respondents say that they spend three hours, or more, at work each week thinking about or dealing with issues related to their personal finances.
The bottom line seems to be that by making your employees more financially savvy — which is desirable in itself — they get more work done, are more loyal and engaged, and their overall wellbeing improves. None of which should be undervalued.
Also published in HR Zone