Today more than ever, financial stability is an essential component of overall health and wellbeing. It can affect people’s mental and physical health and significantly impact performance and concentration levels in the workplace.
In the UK today, and right across the world, employees’ financial wellbeing is a significant concern, with many of those in part-time work, shift work and even full-time employment now struggling to manage their finances because of the dramatic increases in the cost of living.
Being ‘financially well’ can encompass a wide range of different factors, including having enough income to cover expenses, having some savings and investments, being able to manage debt effectively, and having access to financial products and services.
Achieving financial wellness is not just about having a high income or net worth, but rather the ability to navigate financial challenges with confidence and stability. This can, in turn, have a positive impact on mental and physical health, as well as overall quality of life.
Yet, according to research by the Chartered Institute of Personnel and Development (CIPD), financial worries were one of the most significant causes of stress for UK employees. This stress then results in absenteeism, and reduced productivity, leading to potential financial losses for employers.
Employers have a responsibility to support their employees’ financial wellbeing, whether that’s through financial education, employee benefits or access to financial advice. While many are beginning to recognise and support their employees in this area, acknowledging that it is essential for overall wellbeing, companies must ensure they are taking the necessary steps to equip their employees with the tools and resources needed to survive and navigate their financial health.
Championing support in the workplace
Financial education should no longer be a taboo, as confidential and practical advice is highly effective in supporting employees’ financial wellbeing and can help them to develop the skills and knowledge they need to manage their finances effectively. This education could encompass topics such as budgeting, debt management, and retirement planning. Making it accessible within the workplace helps employees to feel more confident and supported in managing their finances and can reduce anxiety.
Employee benefits such as pensions, healthcare plans, and life insurance can also help employees recognise and future-proof their finances over the long term and can help employers attract and retain top talent. Employees are more likely to stay with a company that offers such financial support. But these resources need to be used and appreciated for an employer to get full value, so integrating these into a wider financial wellbeing strategy is key.
Access to financial advice can also be hugely beneficial for employees. This can help employees navigate complex financial situations, such as debt management, retirement planning, and investment decisions. Employers can also support the financial wellbeing of their workforce by creating a culture of openness and support, so employees seek help when they are struggling with their finances, reducing the stigma associated with financial difficulties.
Employers can work with financial wellness companies, such as Maji, to provide employees with access to affordable and confidential financial digital coaching, tools, and support from vetted experts – all geared towards helping employees manage their finances more effectively.
In addition to practical advice, some companies will benefit from offering financial assistance to help their employees manage unexpected expenses or emergencies. While possibly not feasible for all businesses to offer such support, it can be especially helpful for employees who may not have access to traditional lines of credit.
Likewise, there can be a significant link between mental health and financial wellbeing, so providing access to mental health resources or counselling can help individuals address underlying stress or anxiety related to their financial situation.
The bottom line
By integrating financial education, employee benefits, access to financial advice, and a culture of openness and support in the workplace, employers can play their part in improving their employees’ wider wellbeing and satisfaction at work.
Financial support in any form can lead to reduced stress and anxiety related to money, positively impacting both mental and physical health, as well as boosting overall fulfilment at work. It can also help staff to feel more in control of their financial situation and better equipped to handle unexpected expenses or emergencies, resulting in greater economic stability and security.
For the business, promoting financial wellness can increase employee productivity and engagement, as individuals who are not preoccupied with financial stress can focus on their work and perform to their best ability. Aside from a reduction in absenteeism and presenteeism, employers championing their staff’s financial wellbeing may also see a boost in retention rates, as all of us are more likely to stay with an employer that invests in our financial wellbeing.
Ultimately, investing in your workforce’s ability to navigate their financial environment can lead to a more positive work culture, where employees feel supported and valued, which results in increased morale and job satisfaction.
Sahil is the CEO and co-founder of Maji, a financial planning and education platform for employees. He has over 15 years’ experience within UK financial services with deep expertise in building and launching pension products, consulting, scoping out new markets and devising go-to-market strategies. Before Maji, Sahil founded a marketplace to help people buy from impact led brands and a tech consultancy called Codezilla. Sahil has a First Class BSc in Computer Science from City University London, is a CFA charter and IMC holder.