Financial wellbeing is having control over one’s money and being able to make the right financial choices, including being able to manage unpredictability and unexpected expenses. A 2018 Centre for Economics and Business Research (CEBR) study found that only 5% of employees are offered support with their finances – 67% think they would benefit from this type of support.
What are the effects of poor financial wellbeing which can be reversed or partially alleviated by an effort to improve it?
- Sleepless nights
- Difficulty concentrating
- Lower productivity at work
- Poor colleague relationships
- Panic attacks
- Anxiety and depression.
All of these can lead to increased absenteeism and therefore greater cost for an employer.
How is financial wellbeing achieved?
From an employer’s point of view, greater communication with employees on the benefits available to employees (discounts on gym memberships, restaurants, help-to-buy schemes for car purchases, etc.) can help a workforce feel more financially secure and able to make the most responsible choices.
Better advice on retirement and pensions is another way to increase productivity and the talent attracted by an employer, studies have shown.
The 2018 CEBR study also showed that financial wellbeing varies greatly among sectors, with IT and telecoms employees faring best in terms of their financial wellbeing and those employed in the retail sector, the worst.
Concerted efforts can be made by employers in the more adversely impacted sectors to mitigate this.
There are a few ways to confirm what sort of reasonable adjustments should be made to ensure financial wellbeing among the workforce:
Employers do not have a legal duty to help improve or facilitate employees’ financial wellbeing. However, an employer may choose to help employees in certain ways, or by making certain adjustments to allow them to better manage their finances, as it is in the employer’s interest to have a financially stable and healthy workforce, particularly when the 2018 CEBR study found that poor financial wellbeing costs UK employers £1.56 billion a year.
Studies have also shown that people from less affluent demographic categories, such as those with lower income, have higher incidences of certain health conditions and therefore, an employer should endeavour to be aware of this and make those reasonable adjustments where required, as stipulated in the Equality Act.
Some reasonable adjustments to facilitate financial wellbeing in the workplace might include:
- Flexible working hours to accommodate an employee’s childcare or carer responsibilities where paying for a care service is not affordable, for example.
- Providing information sessions, particularly if a significant number of employees would benefit from better financial education and information of financial planning tools, etc.
- Raising awareness so that colleagues understand the importance of financial wellbeing and the consequences of not maintaining it (stress, mental health issues, etc.), which can, in turn, affect performance at work. This is particularly important during the current Covid-19 pandemic, which has had a widespread impact on existing financial wellbeing.
Financial wellbeing signposting
The Wellbeing Project – organisation providing wellbeing and resilience resources for employers and employees through workshops, webinars and courses and helping to cultivate wellness in the workplace (0800 0856899).
Mercer – organisation which provides free resources on money saving and planning, podcasts on financial matters and links to other sites with useful information on financial wellbeing, with a view to helping employers help their employees with financial wellbeing.
Money & Pensions Service – an arm’s-length body sponsored by the Department for Work and Pensions, working to provide people in the UK with financial guidance, including information on the UK’s latest Strategy for Financial Wellbeing.
Other Research Resources