Financial Wellbeing in the Workplace : A practical guide for employers

Today, (October 10^th) marks World Mental Health Day 2022. The theme this year is ‘make mental health & wellbeing for All a global priority’. There is potential for many negative impacts on our mental health at the moment; from recovering from the pandemic, the world climate emergency, and the ongoing war in Ukraine and the consequential displacement of its citizens.

As the UK also experiences an ongoing cost of living crisis, there is an ever-growing spotlight on financial wellbeing. Financial wellbeing is one core component of overall employee wellbeing, and has often been overlooked by HR professionals as a personal matter, rather than a business responsibility.

What is Financial Wellbeing?

Financial wellbeing isn’t about how much money a person has, but rather their relationship with money and their overall sense of financial security. This sense of security is naturally affected by economic instability and can have a substantial impact on employee mental health – survey statistics paint a grim picture of the impact of the rising cost of living on people with 2 in 3 workers reporting that their financial situation is affecting their mental health.

Figure 1 – 7 Elements of Workplace Wellbeing (CIPD, 2022)

Financial wellbeing in the workplace

Similar to arguments in support of mental and physical wellbeing at work, these “individual” matters can add up to become a business problem. Poor financial wellbeing in employees can contribute to underperformance or disruption, for example, through high turnover or employee absence. If one of the key purposes of work is to provide financial security – and employees are not able to achieve this – it is understandable that some employees may disengage.

According to the CIPD, those who work for an employer with a financial wellbeing policy are more likely to:

• know what they need to do to get a pay rise (36% versus 16% of those working for an employer without a policy).
• be satisfied with their employee benefits package (70% versus 28%),
• agree that their job protects them from poverty (82% versus 66%).

On a wider level, such policies support a wider goal of responsible and sustainable business, which can withstand not only the current economic instability but build resilience for future hurdles.

How can employers help to support financial wellbeing in the workplace?

It’s easy to offer advice such as “pay more”, however, this won’t be feasible for every business. There are other ways businesses with less capital can help to reduce pressure on employees including:

• Creating a financial wellbeing policy which sets out current financial practices and longer-term goals for the business to meet, such as paying a fair wage, supporting employee progression, and providing financial wellbeing benefits – for instance an Employee Assistant Programme.
• Engaging with external agencies such as the Money & Pensions service. to provide employees with resources to improve employees’ money skills and raise awareness of available government benefits.
• Trialling initiatives such as flexible working schemes or salary sacrifice systems can assist employees who have higher costs of living e.g., through childcare/travel.

Need some support?

Offering expertise in all areas of HR, Think People can assist with a range of interventions to improve financial wellbeing in the workplace, from drafting a policy bespoke to your needs and the redesign of work in your organisation, to salary benchmarking to ensure the competitiveness of your offering.

For more information, please contact us at enquiries@thinkpeople.co.uk or by calling 02890 310450 (ROI – 00353 1969 7865).

Register

We are also hosting a workshop on the topic of ‘Fostering Resilience & Wellbeing in Yourself and Others’ on Thursday 20th October 2022. The workshop will focus on psychological techniques for accurately analysing and managing your worries, and regaining control when you feel overwhelmed. You can register for the workshop by clicking here.