Employees are the number one asset for any business, and we know that taking proper care of them makes a tangible difference to engagement scores, productivity and service delivery. We are starting to notice that wellbeing is a topic being taken seriously by organisations of all shapes and sizes; whether it’s “get fit” initiatives such as the 10,000 steps Global Corporate Challenge, offering workplace gym membership, or even introducing flexible working schemes. However, one crucial element that is not getting the same attention is financial wellbeing.
The current state of financial wellbeing
We recently conducted research into the state of the nation’s finances, and the subsequent impact this has on businesses. It revealed 70% of the nation’s workforce admit to wasting a fifth of their time at work worrying about finances, in turn resulting in at least 17.5 million working hours lost per year as a result of employees taking time off work due to financial stress.
Even more worrying for businesses was the perceived discrepancy between employer and employee attitudes towards financial wellbeing. Sixty-seven percent of employees believe their employer doesn’t care about their financial wellness, and only 3% would turn to their manager or HR department about their financial worries. Yet, according to UK employees, over half would value financial assistance from their employer.
One only has to take a look at recent news headlines to see that the growing financial strain on UK workers is not disappearing anytime soon, and it is under this backdrop that employers must be taking active action.
An evolution in employee benefits
While many organisations may offer access to some financial benefits through their benefits programme, such as advice and guidance on wills and mortgages, there is an option to take this even further by offering employees the opportunity to borrow and save together in their workplace.
New solutions now exist that can offer employees loans at vastly better interest rates than are currently available from the high street banks. Thanks to technology, some systems can bolt onto existing payroll systems, meaning payments can automatically be deducted through payslips – at a rate that the employee can afford.
While this is one important way that businesses can take active steps in relieving employee financial stress, the current economic climate provides employers with the perfect opportunity to improve their workers’ financial education.
Education, education, education
It’s clear that there are very real financial pressures facing the workforce. However as with any problems a lot of the time it is mind over matter. Just as UK employees are suffering from financial anxiety, there is also a terrible culture of unsustainable borrowing, relying on credit, and not putting any savings aside that needs to be addressed.
Having worked in banking for many years I have seen the all too slippery slope which can be created by bad habits. However, it doesn’t take much to address this trend and turn people from borrowers in to savers. More often than not a change in attitudes towards personal finance, and some easily implemented advice can significantly improve the financial wellbeing of employees. The responsibility lies with the HR department to make sure they are not only actively offering this type of advice, but that they make themselves approachable to any employee who is seeking advice on a financial matter.
More and more workers are looking to their employer for help with financial matters and as more millennials enter the workforce it’s not a problem that’s going to go away. Employers must act now to address the growing financial wellbeing crisis. Financial education, awareness and understanding are key to employees making smart, well informed financial decisions; in turn reaping endless rewards for the employer.
By Monica Kalia, co-founder and chief strategy officer of Neyber