Here’s why employee financial wellness is good for business
Companies must “destigmatise” financial wellness initiatives and share success stories where appropriate.
Let’s face it, over and above work stresses and demands, employees are also dealing with the after-effects of the Covid-19 pandemic, returning to the office after a long period of being at home and rising fuel, food and living expenses (leading to ongoing debt pressure).
According to Mercer’s Global Talent Trends 2022 report, approximately 36 percent of C-suite executives have acknowledged that investment in employee health and wellbeing has delivered a measurable return for their businesses.
Further to this, research also suggests that financial wellness initiatives are just as effective as health wellness programmes, particularly when it comes to positively impacting employee behaviour. So, what exactly are the business advantages of helping employees effectively manage their economic lives?
Healthier and more focused employees
Perhaps not surprisingly, the World Economic Forum (WEF) estimates that poor mental health results in lost employee productivity, amounting to $1 trillion annually. Financial stress is a key contributor to psychological issues such as chronic depression and anxiety, and can also lead to physiological symptoms including headaches, digestive issues, tension, back pain and insomnia, among others. Some employees may also turn to destructive coping mechanisms, for example, drugs or alcohol.
At the end of the day, less stressed employees perform better and make less mistakes. They are also more aware of their physical and mental health, and in a better place to make sound decisions and implement corrective and preventative measures.
What’s more, employees who are adequately equipped with financial wellness tools and resources are less likely to be distracted by personal finances at work, dedicating precious work hours to tasks and productivity.
Increased creativity and innovation
Employees who are always worried about money and expenses aren’t going to try different things or take any risks, critical components of organisational innovation. Stress also negatively impacts those parts of the brain that drive learning and creativity, preventing employees from being able to solve challenging problems or come up with alternative approaches.
The desire and ability to collaborate are also compromised – increased stress levels often result in ineffective communication between colleagues and inevitable workplace conflict. This does no favours for business or revenue growth and can actually contribute towards higher employee turnover rates.
Stronger employee loyalty
Post-pandemic, cash-strapped employees are increasingly changing jobs for monetary reasons, over and above corporate culture expectations. Consequently, businesses that offer financial wellness programmes are more likely to retain employees and attract top sector talent in the long term. This avoids unnecessary expenditure such as the exorbitant costs of recruitment and training, not to mention the unrecoverable loss of industry skills and company knowledge.
Like mental health assistance, employees may be embarrassed about asking for financial advice or may be reluctant to share too many personal details with employers. As such, it is critical that employers emphasise that only participation will be tracked and no financial information will be shared. Companies also need to “destigmatise” financial wellness initiatives and share success stories where appropriate.
Making these programmes accessible also gives employers an opportunity to demonstrate that they genuinely care about employees, fostering a more welcoming environment characterised by mutual trust.