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Picking up the tab: Why you should care about financial wellbeing in the workplace

August 29, 2023
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It seems like almost every day we are faced with yet another consequence of the cost of living crisis. And with prices constantly rising, it’s no wonder that employees are feeling the weight of this on their shoulders. This can negatively influence their overall wellbeing, which affects their professional life, and in turn — you guessed it — impacts your business.

That’s why so many businesses today are investing in the financial wellbeing of their staff. But what is financial wellbeing? And why should you care?

What is financial wellbeing?

Financial wellbeing is a sense of security when it comes to your own financial situation. It’s knowing you are going to be able to pay your bills and essentials, as well as save and protect yourself in case of emergency. The knowledge and understanding of your finances are also part of this — making wise decisions and reaching long-term goals are vital for financial wellbeing. An individual who feels stressed about money would have low financial wellbeing.

Further reading: How to support your employees’ financial wellbeing?

What are the benefits of supporting employee financial wellbeing?

In an ideal world, employees would have their ‘home life’ and financial situation separate from work. As we all know, however, workers are human beings, and can be severely affected by external factors, even when they’re doing their job. Their financial situation is one of these factors. With 34% of adults in the UK feeling anxious, 29% stressed, and 10% hopeless regarding their finances, this is a serious issue that needs to be addressed by employers, as their main income provider. Supporting your staff’s financial wellbeing has many advantages for the business.

1. Engage your employees

When you’re constantly thinking about making ends meet, it becomes quite difficult to be enthusiastic about your job. According to a recent report from PwC, 45% of employees struggling with their finances spend several work hours thinking about it, which limits their engagement. With financial difficulties on the rise, this spells a huge problem for businesses.

A good financial wellbeing programme can relieve some of these stresses and help your employees enjoy their job. But it doesn’t stop there — financial security would show your staff that you care about them, and therefore motivate them to work hard and retain their jobs. Without security, there’s no engagement.

2. Enhance productivity

Rates of productivity continue to fall significantly around the world. Maintaining a productive workforce is a high priority, but, without financial wellbeing, it’s only going to continue to decline. According to the Financial Post, stress regarding money cost over $40bn in lost productivity in 2022 alone.

The issue is similar to that of engagement — it’s hard to reach your optimal productivity level when your attention is split between your job and how you’re going to survive this month’s rent payment. This becomes exacerbated when employees are forced to take up another job just to pay the bills, rendering them more tired and even less productive. Supporting your people’s financial wellbeing will boost productivity levels and circumvent some of the downfalls that create low productivity in the first place.

3. Reduce turnover

As the main source of income, a job has a particular impact on an individual’s financial wellbeing. If they do not earn a living wage — or one that is enough for them to live comfortably — the first thing they might change about their lives is their work. Understandably, low pay was the top reason for employees to leave for a new job, with 63% stating this as a reason.

Turnover is a huge concern for businesses today, considering the cost of replacing an employee is so high, not to mention the disruption it causes and the impact on engagement. Yet, the turnover rate today stands at 47%, making it a pressing issue. By ensuring you have a good and sustainable financial wellbeing programme, you can retain more employees and save money on potentially having to replace them.

4. Improve performance

Your organisation’s performance is made up of the ability of individuals to carry out their roles to their fullest potential. Here too, financial wellbeing has an immense impact. 80% of employees believe that stress around their financial wellbeing negatively affects their performance at work, but it doesn’t end there.

Ever wondered why it’s called ‘financial wellbeing’? Well, it’s because it is one segment of our overall wellbeing. Just like our physical and mental health are influenced by one another, so is financial wellbeing. According to WebMD, low financial wellbeing was found to be connected to many conditions, such as headaches, high blood pressure, digestive issues, sleep problems, muscle tension, and even heart arrhythmia. With low financial wellbeing, you’re twice as likely to have poor health.

This means that employees who are stressed about their financial situation aren’t only performing poorly when they are at work — they also take more sick days. Absenteeism costs between 2%-16% of an employees’ annual salary, so it’s not a cheap business. Truly caring for your employees’ financial wellbeing will boost your company’s performance and unlock its full potential.

Want to learn how the Thrive platform can help you improve your employees’ financial wellbeing? Book a demo with us today.

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