How poor financial wellbeing impacts employees as well as employers
We are becoming increasingly more aware of our mental health thanks to initiatives such as Mental Health Awareness week which is the UK’s national week dedicated to raising awareness to our mental health. This year Mental Health Awareness week is happening on 18th to 24th May 2020, hundreds of events are run up and down the country in schools, businesses and community groups to raise awareness. This fantastic work is shining a light on our Financial Wellbeing as we are beginning to understand the true impact poor financial planning has on a person’s overall wellbeing. As more organisations turn to it as a ‘must have’ employee benefit, others are wondering whether they should be implementing a financial wellbeing programme in their workplace and how this can benefit their employees and their business.
As awareness continues to grow, we find more studies being performed to show the benefits of providing the tools to help employees with managing their own Financial Wellbeing and ultimately their mental health. The Planned Future team have taken the time to review a range of reports and studies to provide you with the headline benefits of implementing your own Financial Wellbeing programme. Below you will find a section that shows the affects that poor financial wellbeing can have on employers and also their employees.
In 2017, the CIPD produced their Employee Financial Wellbeing report found that 1 in 4 employees admit that financial worries impact their productivity at work. This figure alone shows how important workplace financial wellbeing can be and that by implementing a financial wellbeing programme in your workplace can improve productivity. Improvements can also be seen in customer satisfaction, greater profits, improving employees’ welfare and more.
Employers want employees to turn up to work, although this can be half the battle. The cost of presenteesim and staff engagement also needs to be considered. Aegon’s recent report also found that 2.4 million employees throughout the private sector have experienced a fall in productivity over the last three years, as a result of financial concerns. By implementing a financial wellness strategy employers will have the resources to confront this issue.
Employees having to take time from work due to mental illness it something we all want to avoid. Various factors can contribute to our overall mental health, including financial worries. PricewaterhouseCoopers in 2016 found 45% of employees claim that money matters are their #1 cause of stress, a condition which leads to 15 million work days off each year in the UK.
As more research is produced to show the benefits of good financial wellbeing, we start to get an idea of the trust cost. Aegon’s Financial wellbeing in the workplace report uncovered some staggering results. The report shows that poor financial wellbeing costs UK employers £1.5bn each year through absenteesism and presenteesim.
We already know that there is a direct correlation between mental and financial wellbeing. When CIPD published their financial wellbeing report, they found various correlations. Some of the effects on employees are listed below:
- 19% lost sleep over money worries
- 10% found it hard to concentrate
- 8% spent working time dealing with money problems
Many of us struggle understanding financial jargon. One of the reasons why the Money Saving expert has proved to be so popular. By incorporating financial education into your financial wellbeing programme, staff can start to understand issues that may affect them. Whether it’s understanding their pension scheme or other more complex issues like the lifetime & annual allowance, staff can be more informed to make better financial decisions moving forward.
Retirement can be a daunting time for us all. For many, a complete change in life style and finances. By implementing a financial wellness programme, employees can find ways to positively affect their retirement. Furthermore, by educating employees early on in their career, they will have the opportunity to make significant improvements to their lifestyle quality in retirement.
Planning financially for the future is important to us all. By doing so, we can avoid the dreaded ‘pay day loans’ and credit card debt. Step Change, a debt charity carried out research and produced their report back in 2019. They found that on average, each of their clients had an average unsecured debt of £13,799 and that this number has been gradually increasing over the past three years.
This level of debt has been so disconcerting to politicians that it has led to a recent legislation changes prohibiting gambling using credit cards.
Final thoughts
More and more organisations are turning to financial wellbeing to improve their employee benefits. At Planned Future, we have seen a significant increase in the number of organisations contacting us in the past year. Ageon’s financial wellbeing survey also showed us that 35% of survey respondents feel they would benefit from this kind of support.
There are many ways in which to support your employees. Whether this be through onsite workshops, financial clinics or online support. Financial wellbeing programmes can be tailored to organisations to fit all sizes and budgets.
If you would like to learn more about how Planned Future can help support your employees with their financial wellbeing, simply contact us using the form below.