The impact of financial stress on employees
The thought of an employer being involved with an employee’s health and wellbeing would have once been frowned upon. At best, there might have been some token initiatives around physical health (gym memberships, information sessions on healthy eating and nutrition, etc.). But mental health and financial health? Not likely.
COVID-19 changed the game. Looking after the health and safety of workers – particularly those in the frontline – took on new importance. Today, employees welcome initiatives that help them to better manage all aspects of their health and wellbeing, and employers are stepping up to the plate.
A 2022 study by Mercer revealed that employee wellbeing benefits are perceived by executives as the people initiative that will deliver the second greatest ROI in the next two years (after reskilling).
While a holistic approach to supporting health & wellbeing is desirable, the most cut-through is being seen with financial wellbeing benefits.
A 2022 survey of employees by PwC revealed that the impact of financial stress can be far-reaching (see graph below).
For those employees stressed about finances, 76% said they would be attracted to another company that cares about their financial wellbeing. Even for employees who said they were not stressed, 57% said they would be attracted to another company that cares about their financial wellbeing. Note the key words here are “financial wellbeing”; it’s not necessarily about more money but rather providing the tools, resources, confidence and education to help people navigate through tough times.
A comprehensive November 2022 report from Wagestream Australia, based on a survey of 500 HR professionals and more than 1000 employees, found…
- Almost 30% of employees do not have enough money for food and regular expenses
- Less than 50% are able to save regularly
- 40% struggle to meet bills and commitments from time to time
This is an issue impacting employees and employers worldwide. A global study by AXA found that 46% of UK respondents are feeling overwhelmed and uncertain about the future. The UK’s cost of living crisis is having a particularly negative impact. Data from the Centre for Economics and Business Research revealed that financial stress and concerns among employees are costing UK businesses up to £6.2bn alone in sick days and lost productivity. Their data showed that 10% of full-time and part-time employees missed days at work due to financial worries, with an average of 4.9 worker days lost per year.
What can employers do to improve employee financial wellbeing?
The Wagestream report highlighted a disconnect between employees and HR. While 58% of HR professionals felt their employer offered financial wellbeing support, just 36% of employees felt the same. How can that disconnect be closed and what should employers be offering to support their employees?
A holistic financial wellness benefits program may be one solution. A holistic program combines tools, education, and resources to help employees progress towards their goals – such as paying off debts or saving to buy a house – and creates lasting behavioural change.
Top-line results from Wagestream’s survey include:
- 77% of employees said that their employer enabling them to separate money for bills was appealing
- 48% would think favourably of their employer if they offered ways to help manage and control their debts – this was particularly appealing for those aged 18-24
- 68% are interested in ways to make building savings easier
- 73% said they would think more favourably of their employer if they offered engaging financial education
5 tips for launching a financial wellbeing benefits suite
To ensure any wellness benefits genuinely have a positive impact on your workforce and your organisation, the Wagestream report suggested these tips:
Speak with employees to understand their needs.
Firstly, make it clear why you are asking for their input, and then ensure a variety of feedback channels are used – e.g. satisfaction or engagement surveys, a dedicated financial wellbeing questionnaire, suggestion boxes, focus groups, data obtained from an Employee Assistance Program (EAP), etc.
Develop a business case and strategy to meet those needs.
As always, winning over senior stakeholders is critical. Outline the specific issues to be resolved by launching a financial wellbeing benefits suite, and align it with the business strategy and culture. Include reasonable but measurable goals, such as improving the employee experience as reflected in engagement scores, boosting productivity, or reducing time to hire and turnover rates.
Assess and implement financial wellbeing offerings.
Once you know what employees want and the organisation is looking to achieve, assess what offering will best suit you. Questions to ask include: Will it be easy for employees to access the benefits? Can they be accessed anonymously? When will services be available (e.g. 24/7)?
Create communication strategies to reduce the stigma surrounding money.
Build communication lines to open up and ‘normalise’ the sensitive topic of money management and give people confidence to ask for help if required.
Measure and track progress.
Consider tracking awareness (e.g. email open rates or event/webinar attendance); employee impact (e.g. financial wellbeing scores); and organisational impact (e.g. sick days taken, attrition rate, employee engagement scores, etc.)
It’s important to remember that financial wellbeing will mean different things to different employees.
Research tells us that financial stress is not evenly distributed across workplaces and impacts vary between cohorts. For example, 27% of women (an 8% increase since 2020), 26% of part-time workers (an 8% increase) and 25% of 30-44 year olds (a 12% increase) reported feeling financially stressed in AMP’s 2022 Financial Wellness Report.
A one-size-fits-all approach to financial wellbeing is less effective than empowering deskless workers to pick and choose from a range of benefits that suit their personal circumstances. That approach is ultimately win-win for your employees and your business.
How Humanforce can help
Humanforce is a leading provider of composable, best-of-breed workforce management, payroll and wellbeing solutions that simplify onboarding, scheduling, time & attendance, pay, employee engagement, and communication for frontline workforces.
With the acquisition of Wagestream Australia (formerly Earnd), Humanforce has launched Humanforce Thrive, a comprehensive financial wellbeing offering that provides real-time income tracking, access to a portion of already earned wages, automated savings, financial education and other wellbeing tools to support the needs of the frontline workforce.
To learn more about Humanforce Thrive and the benefits of an integrated workforce management and payroll solution that covers the entire employee lifecycle for frontline workforces, please contact us or schedule a demo.