Employers underestimate the need for financial wellbeing guidance.
Money worries are one of the biggest causes of stress, impacting people's mental health and their performance at work. But new research from Close Brothers shows that UK employers are underestimating the impact of poor employee financial wellbeing in the workplace.
While 88% of employers think that their employees worry about money, just a third (30%) believe money worries impact their staff while at work.
Among employees surveyed, however, three quarters (73%) said that money worries impact them at work.
Separate research by Aegon suggests that 4.2 million days of work are lost each year due to poor financial wellbeing, at a cost to businesses of £626m per year.
When it comes to financial wellbeing, doing nothing is no longer an option, Close Brothers' head of financial education, Jeanette Makings, wrote in an article for the CBI. Describing it as "the final piece in the puzzle to complete a holistic wellbeing strategy", she said that delivering meaningful and lasting results for both individuals and businesses can only be achieved by addressing all seven areas of financial health: budgeting and planning, debt, protection, savings and investments, retirement planning, properties and mortgages, and tax.
Almost half (48%) of businesses surveyed by Close Brothers do not have a financial wellbeing strategy, but many admitted that poor employee financial wellbeing has led to reduced productivity (22%), loss of talent (22%), and higher absences (19%).
Poor retirement planning was also highlighted as a particular concern, with half of employers (48%) stating that fewer people are retiring from their organisation than they would like, and the same proportion saying the rate of retirement in their organisation is increasing their people costs. A further 45% said that the rate of retirement in their organisation is negatively impacting their succession plans.
Asked about the benefits of improving employee financial wellbeing, nearly a third (30%) of those organisations already tackling the issue said that it helps improve employee productivity, a quarter (24%) found it supports talent acquisition and retention, and 22% said it helps to fulfil their strategic business objectives.
Makings recommends that, to support the needs of all employees, a financial wellbeing programme should include three things:
1. Financial education to raise awareness and confidence, enabling employees to develop the tools they need to deal with the complexities of their financial lives
2. Access to financial advice for those that need extra help
3. Access to savings and investment solutions so people can implement their own plans alongside their workplace pension
Financial wellbeing strategies should also be properly targeted, Makings said: "By pinpointing which of the seven areas of financial wellbeing are the biggest issues and which employee groups are really struggling, employers can ensure that a programme is tailored to employee needs and will provide the best support to get financial health on track."
Corporate wellbeing expert Professor Sir Cary Cooper added: "The benefits of providing advice and support for employees on their personal financial issues are huge. And from an employee perspective, the availability of financial wellbeing guidance in the workplace is becoming a ‘must have’ rather than a ‘nice to have’. By hyper-personalising employee support, businesses can then ensure that their financial wellbeing strategies have the necessary impact."
Are you thinking about introducing a financial wellbeing strategy, or enhancing what you already offer? Outbound Solutions helps connect employee benefits providers with companies looking for new benefits solutions for their staff. To find out more, get in touch with us today.