Many employees in today’s workforce experience financial stress caused by a range of factors, unexpected and expected ones. But what can the employer do? And should the employer be doing anything at all? Or is this a private matter for employees?
What is the impact of the financial wellbeing of your employees?
Employees who are physically thriving, financially secure, emotionally balanced, and socially connected are more engaged and productive. Willis Towers Watson research reveals that organizations with higher levels of wellbeing achieve better business outcomes, including higher levels of employee engagement, improved revenue per employee, greater customer satisfaction and fewer safety incidents. The 2019/2020 Willis Towers Watson Global Benefits Attitude Survey shows that 1 out of 3 employees are living from paycheck to paycheck. This is a challenge for employees and employers alike, as the long-term consequences of financial issues are strongly linked to stress, anxiety, poor health, unhealthy lifestyles, and reduced job effectiveness. As a result of financial problems, employees are absent significantly more often, on average 7 days extra, and this has even further consequences for the employer.
What can an employer do to help?
Since an employer is directly affected by the financial wellbeing of its employees, it is important to offer mental and financial support to employees who struggle financially. Designing benefit plans to help workers manage and maintain their health and finances — and thus remain engaged and productive at work — should be a top priority for companies around the globe.
Many organizations have put programs in place which focus on budgeting. However, few people follow a strict budget, and budgeting is not strongly linked with financial success. Our research shows that financial wellbeing is mainly about impulse control. A focus on behaviors may therefore be more successful. Effective tactics need to equip employees to make sound decisions ‘in the moment’. Support from family, friends and coworkers can have a large role in reinforcing good financial behavior.
Talking to your employer about financial problems is rather unusual and uncomfortable, associated with inhibitions. It is therefore even more important that the employer does not find out which of its employees makes use of the service. External support in the form of counselling, which deals anonymously with employees’ concerns and advice, is recommended.
The Willis Towers Watson’s Benefit Trends Survey 2019 also shows there is a lot of mistrust towards financial institutions. If you are going to offer something, realize that there is mistrust in the market, and it is therefore important to use a broad suite of tools and communications methods to address financial issues.
Financial needs and desires vary throughout the course of one’s life
When designing financial wellbeing programs, it is important to take the diverse needs of today’s multigenerational workforce into account. Financial wellbeing is not a stand-alone issue but an important part of someone’s individual journey.
What financial security looks like for employees can vary widely by age, gender, salary, life circumstance and individual outlook. One size does not fit all. Younger workers are facing job insecurity, student debt and high housing costs. Whilst baby boomers are approaching retirement, working longer in greater numbers, and are concerned about their health and retirement savings.
Do you need support?
If you have any questions or concerns and would like to discuss financial wellbeing in a one-on-one conversation, do not hesitate to contact our experts.
