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Financial Wellbeing at Work – Employee and Employer Benefits

Brewin Dolphin explore how understanding and supporting employees’ financial concerns can improve wellbeing and productivity

Often overlooked, financial wellbeing is a major driving force behind our overall wellbeing and has a big influence on our mental health.  As more employers start to recognise how the pressures of financial uncertainty can affect performance in the workplace, Brewin Dolphin shares their expert opinion on why financial wellbeing is so important, tips on how to approach such a sensitive subject, and how you can implement a financial wellbeing strategy into your own workplace.

What is financial wellbeing?

We live in the age of wellbeing. We are consistently being told to take care of our physical wellbeing, mental wellbeing, social wellbeing, and emotional wellbeing – but there is one that is often overlooked: financial wellbeing.

Our personal experiences and histories shape the way we feel about our money, so the detail of what financial wellbeing means to each of us varies hugely. However, we can say that someone who is in a good state of financial wellbeing will feel that they are in control of their financial situation, can meet all their current obligations, are well prepared for the future and can make choices with their money that allow both their family and themselves to enjoy life.

Financial wellbeing

Why is financial wellbeing in the workplace so beneficial?

Financial wellbeing is a major driving force behind our overall wellbeing and has a big influence on our mental health. Healthy and happy employees are more productive, but those dealing with financial issues often suffer detrimental effects on both their home life and at work. It is in everyone’s interest to reduce the likelihood of financial stress occurring.

Everyone can benefit from financial wellbeing. Worrying about money is not limited only to those with debt, to younger workers, the lower paid, or those planning for retirement; everyone worries about money at some point in their lives. In fact, those with the highest and lowest levels of pay experienced high levels of stress-related to finances – 49% of those earning £10-15,000 and 49% of those earning over £100,000 p.a. worry about their finances.[i]

Financial wellbeing is not just about how much you earn, but about the level of control you feel you have over your finances, irrespective of pay and grade. Employers are facing increased pressure to help their employees make good financial decisions, make the most of their earnings, and feel more in control of their money.

Employees who are happy and not burdened by financial concerns are more productive – only 6% of staff who said they had no financial worries had trouble finishing daily tasks vs 44% of those who reported worrying.[ii]

Financial wellbeing

If an employer does not address financial concerns, how might this affect employees?

Money anxiety follows your employees to the workplace. With their mind on debt, household expenses and lagging retirement readiness, their productivity suffers. When times get tough, financially stressed employees can turn to expensive payday advances, take out loans and change jobs for marginal pay increases.

One in four UK workers reported to the CIPD that money worries have affected their ability to do their job. Financial worries can impact productivity in several ways. 19% of employees said they had lost sleep due to worrying about money. This alone can lead to a lack of focus, stress, depression, or other mental health conditions. As a result, employers looking to reduce the number of absence days and improve performance are increasingly focused on the link between financial wellbeing and greater productivity.

Research by Salary Finance estimates that money worries cost the UK economy £120 billion and 17.5 million lost hours of work. Treating employees’ finances as a private matter might seem like the easier option, but it’s hard to ignore the knock-on effect to a bottom line.

Job roles that require an employee’s personal finances to be well organised can add additional pressure. Partners in private business or professional practices can be worried by not only their own, but their fellow partners’ finances.

Financial wellbeing

What can employers do to understand and support their employee’s financial concerns?

It is very important that employees feel that they are appropriately rewarded for the work that they do, but payroll is only how they make a living – financial wellbeing is how they make a life.

Education plays a huge role in providing employees with the tools needed to take control of their financial life, helping them to understand when to ask for help. Lack of understanding and misconception prevent many people from making positive and effective financial choices. 58% of workers say that they face obstacles in managing their financial situation, rising to 72% of 18-24 year olds.

It is often the case that companies do not have a dedicated financial wellbeing programme in place – many only have programmes that focus on mental or physical health. There is growing recognition that wellness is holistic and co-dependent. Mental, physical and financial health all work together.

Employers have the chance to play an important role in improving their employee’s financial wellbeing. Existing communication frameworks offer an effective route to raising financial awareness that is trusted by employees. They can be used to build on benefits programmes already in place, for instance health insurance, retail vouchers schemes and car leasing, as well as company pension schemes.

For employees to gain the best advantage of available benefits, as well as other financial opportunities and allowances outside of their company schemes, they must be aware of them. Further to that, they must be encouraged and supported to use them to their fullest extent to promote their own financial situation. This is why financial education is crucial in helping to weave together all the threads of a person’s financial life, helping them to improve their current situation and build a plan for a comfortable and secure financial future.

Financial wellbeing

How can employers implement a financial wellbeing strategy in the workplace?

If you would like to discuss how we can help provide financial education to you and your colleagues, covering a range of relevant and interesting topics, we would be very happy to talk to you. We can integrate our initiative into your current wellbeing programme or work with you to help you build something suitable for your employees.

Brewin Dolphin provides financial advice and investment services to a broad range of clients. Whether you are looking to invest £50 month for your children, have more complex financial needs or have large sums to invest we can help.

 

The value of investments can fall and you may get back less than you invested. Please note that this document was prepared as a general guide only and does not constitute tax or legal advice. No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should contact us. The information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.

 

Thank you to Brewin Dolphin for writing this blog. Brewin Dolphin is based at 10 Wellington Place. If you would like to find out more, you can contact:

 

[i] Salary Finance Ltd ‘The Employer’s Guide to Finance Wellbeing’ 2018-19. p. 4.
[ii] Salary Finance Ltd ‘The Employer’s Guide to Finance Wellbeing’ 2018-19. p 13.