Recent research from the University of South Hampton has found a correlation between mental illness and financial problems. Researchers concluded the likelihood of having a mental health problem is three times higher among people who have debt. Depression and anxiety disorders were among the common mental illnesses people in debt experienced.
In addition, CIPD revealed one in four workers believe money worries have affected their ability to do their job. One in ten says they found it hard to concentrate or make decisions at work because of money worries, and 19 percent of workers surveyed had lost sleep worrying about money.
In light of such findings, it’s clear money concerns may be costing your employees more than just interest. It’s integral today’s workplace includes support for those whose financial issues are affecting their health.
So how can companies implement employee financial wellness successfully into their business and HR objectives?
Make the first move
According to The Institute of Employment Studies, employers should pursue two courses of action when it comes to employee financial wellbeing. The first is the provision of employer-sponsored resources and support for employees in the event of financial problems, and the second is ongoing specialist financial education.
Businesses can provide financially focused employer-sponsored resources in a number of ways, such as by promoting a workplace loan, an employee assistance programme (EAP) or debt counselling if available.
When it comes to financial education, money worries can be very personal and employers need to take a sensitive approach for employees to feel they can open up. Remember, a workshop environment might not have the anticipated effect or participation if there is not a high level of discretion.
One approach is to provide more general financial education presentations, which can be promoted to all employees. You can then offer the opportunity of one-to-one follow-ups with a financial expert for those who want more information in private.
Benefits for specific financial needs
A study from Thomsons has shown UK businesses offering education and a broader range of financial products have seen a 22 percent increase in employee engagement and over twice the effectiveness of their programme than those that don’t.
Businesses can offer financially-focused employee benefits, like Income Protection, Critical Illness and Life Insurance, which provide a financial safety net should a worker encounter the unexpected. These should be considered the foundations in financial benefits for employees.
Some organisations are also meeting diverse needs of today’s workforce by providing a tailored suite of benefits on top of their core offerings, enabling staff to take advantage of those that make sense for them.
For example; research from PricewaterhouseCooper’s 2016 Employee Financial Wellness Survey showed 64 percent of Millennials were stressed about their finances. To help support these rising financial concerns businesses could provide student loan repayment assistance as part of their benefits programme.
A sense of stability
Subsidised memberships, annual leave buy-back schemes and childcare vouchers can offer real-time financial assistance. Pairing these with benefits that provide long-term financial protection, like workplace savings schemes and Life insurance, can offer a great balance to help employees’ financial security.
According to Aviva’s Family Finances Report, 25 percent of families within the UK are not saving money at the end of every month. Also, 22 percent of the UK has made no financial provision for the future.
Introducing workplace savings plans, such as a corporate ISAs, can help employees build a savings safety net to reduce the chances of being in tough financial situations in the future.
Employers can consider offering more than the minimum pension contributions through auto-enrolment and encouraging staff to make additional contributions through matching payments. Individuals with healthy pension savings are far less likely to suffer anxiety about their financial position in the future.
Benefits of Fintech
Developments in financial technology mean employees can start to access a variety tools and apps to assess their current financial position and quantify how much they’re likely to need for situations, such as retirement.
There are a host of personal budgeting apps on offer too – like Mint, Level Money and Pennies – which offers real-time visual spending data, timely reminders for bills and instant notifications if you over-spend. They’re simple to use and raising awareness of such options across your business, can help make staff are aware of what’s available universally and establish the habit of tracking personal finances.
Business experts are beginning to promote employer-sponsored savings accounts because they present employees with an automatic savings device, provide tax breaks and in some cases, allow employers to match staff contributions. Tools like Smarterly offer a simple way for employees to start investing through the workplace.
As financial wellness continues to become a key business incentive, the results will be equally beneficial for both employers and employees. Companies supporting employees’ financial well-being demonstrate they care about their workforce in both a professional and personal capacity. Employees with better financial and emotional support will, in turn, be free to excel without financial distractions and feel more engaged in their place of work.
Liz Walker is HR director of Unum UK
Further reading on mental health
