While general employee wellbeing has received much attention – in particular, as a result of the COVID-19 pandemic – the financial aspect of wellbeing has historically been neglected. Financial wellbeing is the least common area included in HR strategies, despite money worries affecting 47% of UK employees. And, although around half of employers do have a financial wellbeing policy in place, only 11% are actively focusing on it as part of their overall HR and wellbeing strategy. Financial distress (a symptom of poor financial wellbeing) has important implications for both wider employee wellbeing and performance.
Working with the Center for Evidence-Based Management (CEBMa), we’ve summarised the best research on financial wellbeing to show the moral and business case for workplace support, and evidence what employers can do to help in the form of practical guidance and recommendations.
Points to consider
Anyone can face financial difficulties at some point in their lives, but HR professionals should be mindful that low-paid workers are especially at risk. Financial distress disproportionately affects people in more junior and less skilled jobs.
The business case for improving employees’ financial health is clear: Those who experience money worries are more prone to absence from work. Financial distress can also lead to presenteeism, in which employees attend work but, because of health problems or other personal issues, don’t perform to their usual standards.
Tips to support your employees’ financial wellbeing
- Pay a fair and liveable wage to help prevent people falling into financial difficulty.
- Develop a financial wellness programme that helps protect employees from financial shocks. This can include several strands, such as:
a. giving employees more control of their finances through hardship loans or earned salary access
b. employee benefits that reduce living costs
c. financial education that develops ‘soft skills’ of attitude, judgements and behaviour – for example, making people be more inclined to plan or save for the future
d. debt counselling for those who need it, in conjunction with other support. - Communicate about financial wellbeing regularly through a range of channels, both to promote available support and encourage open discussion about financial issues.
- Assess employee financial wellbeing, using tried-and-tested measures, to inform or prioritise action.
Our practice summary presents key insights and recommendations for practice. See the scientific summary for our methodology, technical information on the research and study references.
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