Wellness does not stop with physical and mental health – worrying about finances can have a significant impact on overall wellbeing
Wellbeing strategies that focus only on the physical and mental aspects are missing a key piece – the financial. It’s often the missing piece of the wellness jigsaw, and worrying about money can also affect mental and potentially physical health.
A growing body of research is now causing an increasing number of organisations to realise that by actively trying to improve financial wellbeing, there are benefits for the business as well as individuals.
Close Brothers Business Barometer research in April 2016 found that only 24% of businesses included financial wellbeing as part of their overall wellbeing strategy.
The CIPD/Close Brothers Financial Wellbeing research published in January 2017 shows that a quarter of all workers are so worried about money it is affecting their ability to do their job, rising to almost a third of people in London and those aged between 18-24.
Money worries don’t just affect younger workers or those on lower earnings: everyone will worry about money at some point in their lives.
The CIPD/Close Brothers research shows that 20% higher earners’ (£45,000-£60,000) productivity and effectiveness at work was affected as a result of money worries.
While concerns about how to manage debt was on the worry list, it wasn’t at the top – it was fourth, after earning a wage sufficient to support a reasonable lifestyle; saving for the future; and being fairly rewarded for the work done.
Financial wellbeing is about making the most of the financial opportunities in front of you at every stage in life, and optimising them for your own goals, needs and circumstances. It isn’t about making everyone a millionaire, it doesn’t just apply early or late in a person’s career and it isn’t only about debt or pensions.
An individual’s financial concerns do not change the minute they walk through the door at work. Good financial education is about helping people to look at the whole picture, joining the dots between what’s on offer in the workplace and what’s outside.
That could include helping employees to understand traditional workplace benefits, such as pay and pensions, but also offering support with other areas of their finances, for example mortgages.
Despite being many employees’ biggest financial outgoing, education and advice on buying a property is rarely offered at work.
Just about every aspect of workforce demographics is changing. With increased longevity and more people extending their working lives, the age gap between a company’s oldest and youngest worker could be 60 years.
Within that age range there will be full and part-time staff, a variety of flexible working patterns, men and women, senior and junior, married and single, with children and without.
Employees will not have the same circumstances or needs even if they are the same age, in the same role and have the same pay and benefits. It is simplistic and can be dangerous to make assumptions based on factors such as gender, age or seniority.
That diversity can make it difficult to know where to start when it comes to offering financial education but adding financial wellbeing to an overall wellbeing strategy need not be complex or expensive. Start with the key risk areas and build from there.
So how can employers help?
Offering financial education is a key method in securing financial well-being. Employers who recognise this and support staff with the many and complex financial choices they now face will benefit from more financially secure staff who make well-informed decisions and who, as a consequence, will be more engaged, happier and more productive at work.
Boosting employee financial well-being can boost business performance, which in turn can enable the business to invest more in their employees now and for the future, it is also good for organisations helping to increase engagement, retention and productivity.
There isn’t a silver bullet when it comes to health and money worries, but financial education is fast becoming a hygiene factor for every employer. The workplace is the obvious place for offering financial support. It’s where the most of individuals’ wealth originates, and there’s a natural link to helping people make the most of what’s on offer. And most people trust their employer.
Using that relationship to help people with their finances – not just workplace benefits – improves wellbeing for individuals and for the organisation, too.