As the saying goes, look after your employees and they will look after you. It is a simple concept, but a powerful one because employee wellness is now one of the top priorities in the workplace. For a long time, wellness was defined as the mental and physical health of employees, but neglecting other factors that contribute to an individual’s health, happiness and productivity at work. Employee financial wellness was one of the neglected topics, but now a top priority as it is important to provide the best workplace perks which will retain and attract the best talent.
What is employee financial wellness?
Financial well-being is the state of being healthy with regard to money. Financial wellness refers to whether a person feels confident about their finances and their ability to manage their finances.
Just like physical, mental and emotional health, financial health is an aspect of overall wellness. Broadly speaking, financial wellness equates to having peace of mind about personal money matters at workplaces. In regards to employees, it is in a company’s best interest to invest in the financial well-being of their employees to ensure maximum productivity and this is often done by providing a compensation package, inclusive of sufficient pay and benefits.
Why do employers need to provide financial wellness?
“Attractive salary and benefits” have always been ranked as the most important employee value propositions. Employees are more likely to experience less stress when they are financially secure and the opposite is true when employees are financially stressed. They will be having a hard time trying to make ends meet for themselves or their family.
Enhancing financial wellness among employees may result in healthier workers, fewer absenteeism, attrition rates and more employee satisfaction. There is no doubt that employees are more likely to stay loyal to their employers if they are taken care of financially.
How does financial stress impact employees?
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Financial strain hurts your workers' personal and professional life and, therefore, your business. Long-term financial stress can impact a person’s overall wellbeing.
Employees with elevated levels of financial stress are four times likely to experience a decrease in overall household income, and struggle with meeting monthly household expenses.
Please note that these stressors can carry over into the workplace. Concerns about being able to manage finances and pay bills have naturally impacted employee performance, leaving many stressed and distracted. It is only through offering financial wellness programmes for your workers that mental stress can be reduced, which can potentially improve productivity and retention rates.
Decreased productivity and increased employee turnover
The ability to keep employees is crucial for any business, but it becomes even more important when you consider the financial implications of turnover.
Financial worries are among the many sources which can cause people great amounts of discomfort and stress when dealing with day-to-day tasks. The problems created from a lack of focus can manifest as a general drop in productivity for the organisation at large.
Employers should know that if a person’s finances are unstable, it will affect their focus at work. If this continues and the issue becomes worse, there could even come a point where they lose interest in the bigger picture of the company itself. If this problem is allowed to continue, the employee will eventually walk away to better companies that offer better salaries and packages.
How can we improve financial wellbeing in the workplace?
Pay a fair salary and be mindful of expenses
Not only does a good salary alleviate financial stress and improve staff performance, but it also leads to happier, more motivated employees all around. The best way to ensure that you are paying your employees a fair wage is by keeping up to date with the average salary ranges for different positions and also checking what other companies are paying.
If you see that you are paying your employees far below market rates, then you should consider giving them a pay raise. Employers should do this to avoid employees paying for work-related costs like transportation, meals and office supplies. If employees do have to pay for any expenses up front, make sure you don't delay when it comes to reimbursing them.
Making an all-inclusive compensation package
Most companies only think about what they want to offer when designing their plans, but do not really take much time thinking through what actually works for creating financial well-being for their employees.
A great way to alleviate financial pressure and increase workplace wellbeing for employees is by putting together a benefits package that makes their salaries go further every month. Upping wages can boost productivity and attract the best talent.
This in turn can lead to happy customers who are more likely to use your services again in the future. Appropriate compensation is one way to keep workers happy. Its true some may argue that money isn’t everything, but you should also know that it can keep employees grinding and loyal when business gets tough.
Provide professional financial education resources
One of the best ways you can foster financial wellbeing in the workplace is by providing your employees with professional financial advice, either for free or at a discount. Many people do not have access to financial education resources and are not even aware of their importance or simply do not know where to start looking for them. There are several different ways you can provide guidance on money matters to your employees. One option is including access to a professional financial advisor as part of your benefits package. Another would be partnering with a local financial advisory service and offering their guidance to your employees at a discount.
Financial wellbeing is an essential part of any work environment. It ensures that employees are healthy, happy, motivated and productive — helping businesses to operate at an optimal level.
