Employee mental health and wellbeing is firmly established as an issue leaders need to both be aware of and effectively support.
Joining the agenda as a major consideration for this year is financial wellbeing and the impact of employees struggling with money worries on productivity.
With the rising cost of living vying with COVID-19 as the day’s biggest concern for millions in the UK and around the world, employers who are not addressing financial wellbeing issues with their employees face dire warnings.
Money matters
Mental health organisations and debt relief support teams are ringing the alarm bells for the rising pressures on people both in and out of work.
Vicky Nash, head of policy and campaigns at Mind, says soaring inflation, coupled with uncertainty about jobs and income, is causing people to have to make “impossible choices” between heating and eating, and putting “huge pressure” on those with mental health problems.
Ms Nash told The Independent last month how money and mental health are often linked.
“Poor mental health can make earning and managing money harder, and financial worries can have a huge impact on our mental health.”
Mercer’s Financial Wellbeing Index Report assessed the financial wellbeing initiatives of over 400,000 employees spread across more than 140 companies between April and October 2021.
“More employees are now viewing their employers’ support for their financial wellbeing education and needs as important as the more established support offered for their mental and physical wellbeing,” Mercer’s principal and financial wellbeing leader Jeremy Milton told HR Magazine about the report.
“With employee need and expectations perhaps never having been higher, we would encourage all organisations to actively engage with their workforces to hear more directly what financial wellbeing help and support would have most impact – and then focus on taking the actions that would be most valuable to help your employees take positive actions in the short term,” he added.
Tools more than talks
As described by strategist Alice Evans from WTW, research showed employers have previously felt providing seminars or benefit fairs was a solid business approach to support their workforce.
“Not only are these seen as cost efficient, but they also deal to some extent with the dilemma faced by many employers – worried that in years to come they might face legal action should any ‘assistance’ turn out to be judged as ‘advice’ that was incorrect and has led to poor outcomes.”
But when employees were asked, the research showed this was the least popular or helpful solution and instead they wanted access to apps and tools to better manage their money.
“In stark contrast, for employees the traditional approach of using seminars and benefit fairs is the least popular way to learn about planning their own financial futures.
“What they want are the apps and technological tools they are familiar with in everyday life. They want control and the tools to manage their own finances.”
Alice said the research showed a lot of thinking was still needed across organisations to deliver financial wellbeing support that works.
“If they want to truly meet the financial wellbeing needs of their employees, employers are going to have to find a way to develop more powerful tools to meet the needs of their workforce.
“The challenge is how to do so in a cost-effective way.”
Asking staff what they need
Engineering consultancy Cundall reported how the last 12 months have put financial wellbeing under the spotlight.
“We already have quite a large programme of financial wellbeing support – everything from graduates getting a financial wellbeing briefing when they join, to having retained financial advisers, and advice for those thinking about retiring,” says Carole O’Neil, HR & Training Partner.
“But I do think the pressure on cost of living will see us survey staff to see what more we can do.”
“Traditionally offering vouchers and providing benefits that make people’s money stretch further hasn’t always had much of an uptake, but I suspect these sorts of benefits may now be resurrected.”
Taking action
As employers and leaders recognise the need for more support, employees can also take steps to check their financial wellbeing.
Paul Feeney, founder of Otivo – a financial planning tool offered by some organisations – says examining your finances in the right framework is a good way to start managing your financial wellbeing and look at simple ways of reducing any unnecessary spending.
“As advisors, we are here to ‘nudge’, not judge. You tell us what is important to you, and we help you map out the path to achieving it. You get to choose whether you sacrifice the coffee or not,” Paul said.
“Everyone should be able to live their best financial life. It is our job to make the complex simple – to give people control over their decisions and, ultimately, their financial future.”
Tell your team about your service
If your organisation already provides or joins a financial advice service the key step is to ensure your employees know about it.
Make the service the focus of your internal communications for a season and ask colleagues to take the advice and share the insights they gained.
At CiC we’ve seen how many employees avoid seeking financial advice because they don’t know where to start or because it is expensive – the last thing you need when you are worried about finances.
In providing and signposting your employees to this service, you alleviate those two worries and give your team the means to take that first step towards financial freedom.
And by taking such advice, your employees will see their financial difficulties improve, and in turn, their wellbeing lifted.
References
- CiC: Why financial advice services should be in your EAP
- APM Group: Money Matters
- The Independent: How the cost of living crisis is affecting the nation’s mental health
- HR Magazine: How to deliver financial wellbeing that works