Financial Wellbeing: Why it should be top of the agenda for employers

This informal CPD article, ‘Financial Wellbeing: Why it should be top of the agenda for employers’, was provided by Money First Aid training, who provide participants with the necessary knowledge and skills to assist their colleagues in overcoming financial difficulties, while also helping create a supportive and understanding work environment.

In the ever-changing landscape of employee benefits, the focus has shifted beyond traditional offerings like healthcare and retirement plans. Employers are increasingly recognising the importance of addressing the overall wellbeing of their workforce. This includes the physical, mental and now financial wellbeing of their teams. Financial wellbeing was less of a priority for many organisations until the COVID pandemic and cost of living crisis forced this to be moved up the agenda for both employers and employees. PwC Financial Wellness survey¹ found 57% said that finances were the top cause of stress in their lives. 

Financial wellbeing support is not just a benefit for the employee. There are clear strategic advantages for companies that invest in providing financial wellbeing support to their employees.

1. Boosting Employee Morale and Productivity

A financially stable workforce is a more focused and productive workforce. The link between financial stress and decreased productivity is well established. When employees are burdened with financial worries, their ability to concentrate on work diminishes. CIPD research² found 28% of employees said money worries affected their performance at work, most commonly through lost sleep, health problems such as stress or anxiety, and finding it hard to concentrate or make decisions at work. By offering financial wellbeing support, employers can alleviate this stress, creating an environment where employees are better equipped to bring their best selves to work each day.

2. Job Satisfaction and Engagement

Employee satisfaction and engagement are critical factors in a company's success. When employees feel supported in their financial goals, it translates to higher job satisfaction. Employers that go beyond the basic benefits demonstrate a commitment to the holistic wellbeing of their workforce. This commitment fosters a positive work environment, increasing overall employee engagement.

3. Attraction and Retention of Top Talent

In a competitive job market, attracting and retaining top talent is a constant challenge. Companies that offer comprehensive financial wellbeing programmes gain a competitive edge. PwC Financial Wellness survey¹ found 73% said they would be attracted to another employer that cared more about their financial wellbeing. 

Prospective employees are increasingly looking beyond salary figures; they seek employers who care about their overall wellbeing. By investing in financial wellbeing, companies can position themselves as attractive employers, reducing staff turnover and ensuring a stable, skilled workforce.

4. Reducing Absenteeism and Associated Costs

Financial stress often contributes to health issues, leading to increased absenteeism. Employers who address their employees' financial concerns may see a decrease in absenteeism and the associated productivity losses. By promoting financial wellbeing, companies invest in the health and resilience of their workforce, reaping the benefits of a more present and engaged team.

5. Enhancing Corporate Reputation

In the age of social responsibility, a company's reputation extends beyond its products or services. Employers committed to the financial wellbeing of their employees contribute positively to their corporate reputation. Such initiatives resonate not only with employees but also with customers, investors, and the broader community. A positive corporate image can attract top talent and customer loyalty, creating a ripple effect of benefits. For those organisations seeking B-Corp3 status having a financial wellbeing programme can support your application to get certified.

6. Fostering Employee Loyalty

Employees who feel supported in achieving their financial goals are more likely to develop a sense of loyalty towards their employer. Loyalty goes beyond job satisfaction; it translates to a commitment to the company's success. A loyal workforce is more likely to stay with the company through thick and thin, reducing turnover costs and contributing to long-term stability. CIPD research² found that financial related absenteeism is costing large organisations an average of £323,390 a year.

7. Integrating Financial Wellbeing into Total Rewards

Financial wellbeing support complements a company's total rewards strategy. Beyond salary and traditional benefits, employees value programmes that address their unique needs, including financial wellbeing. By integrating financial support into the overall compensation package, companies create a more holistic and attractive offering for their employees.

8. Cultivating a Positive Workplace Culture

A workplace culture that values and supports financial wellbeing fosters trust, collaboration, and open communication. When employees feel comfortable discussing their financial challenges, it creates a supportive environment where colleagues can share advice and experiences. This positive culture not only enhances teamwork but also contributes to overall employee satisfaction.

Investing in employee financial wellbeing is not just a compassionate gesture; it's a strategic imperative. Companies that prioritise the financial health of their workforce position themselves for long-term success. Beyond the tangible benefits of increased productivity and reduced absenteeism, they build a positive workplace culture and enhance their reputation as employers of choice in a competitive market. As the workforce landscape continues to evolve, embracing financial wellbeing as a core element of employee support is a forward-thinking strategy that pays dividends for both employees and employers alike.

We hope this article was helpful. For more information from Money First Aid Training, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.

References

1. https://www.pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html

2.  https://www.cipd.org/globalassets/media/knowledge/employee-financial-wellbeing_tcm18-113886.pdf