A short guide to employee financial wellbeing
This content is for information purposes only and should not be taken as financial advice. Every effort has been made to ensure the information is correct and up-to-date at the time of writing. For personalised and regulated advice regarding your situation, please consult an independent financial adviser here at Castlegate in Grantham, Lincolnshire or other local offices.
Many things can affect an employee’s productivity, retention, morale and wellbeing. These may include personal relationships and a sense of progression in an organisation. Yet finances also play a key role. Money worries can be significant contributors to stress at work, lack of focus and poor decision-making (e.g. due to lost sleep). In this post, our Grantham financial planners explain why financial wellbeing is crucial to a workforce and offer ideas to cultivate it within an organisation. We hope you find this content helpful. If you want to discuss your own financial plan, please get in touch to arrange a no-obligation financial consultation, at our expense:
01476 855 585
info@casfin.co.uk
Why should employers be concerned about employee financial wellbeing?
According to one study, two-thirds of employees who struggle financially have reported poor signs of mental health which might affect their performance at work. 20% of people exhibiting mental health struggles say that these have been the target of discrimination in the workplace, often further exacerbating suffering (and, in turn, poor performance). Employers clearly can benefit, therefore, by taking a role in promoting their employees’ financial wellbeing.
Ideas include offering more flexible options at work, such as allowing parents to attend to their caring responsibilities to avoid additional costs (e.g. arranging paid childcare). Providing mental health training to line managers can be another good option, helping them identify signs that workers are struggling with their mental health and directing them to appropriate support. Those in authority can also foster a workplace culture of talking about money, rather than letting it stay a taboo subject. This can help employers identify the priorities of workers and align financial benefits accordingly. For instance, perhaps many employees would value the provision of “death in service” benefits, to provide some financial protection to their loved ones.
Taking care of your own financial wellbeing
Research by the CIPD (Chartered Institute of Personnel and Development) has found that 25% of UK employees are laden with money worries – hampering their ability to work. This is hardly surprising in light of the COVID-19 pandemic, the “Great Resignation” and rising wholesale food and energy prices (driven by the war in Ukraine). Whilst employers can help staff using wellness HR strategies, there is much you can do to help your own financial wellbeing.
Financial wellbeing is ultimately about feeling in control of your wealth and finances, knowing that you can pay your bills and deal with negative, unexpected events (e.g. injury which stops you from working). A good starting point is to examine your own job. How secure do you feel? Perhaps your employer is very approachable, pays you fairly and offers a lot of support when you need it (e.g. skills training). Alternatively, if your role is tentative – perhaps due to problems in the organisation – can you solidify your position (perhaps by up-skilling)? Or, is it time to start looking for other opportunities where you can add more value and grow a sense of financial wellbeing in the workplace?
Quite often, feelings of financial insecurity are not directly traceable to your employer, but to your own situation and choices. Perhaps you have accumulated some costly debts, such as unpaid credit cards. Maybe your emergency fund is low and you feel anxious about how you can afford sudden, unexpected costs (like a broken boiler). Alternatively, perhaps you are not progressing as quickly as you want towards your financial goals, such as saving for a mortgage deposit. The good news is that there are still options to enhance your financial wellbeing – starting with your spending. Making a review of your monthly budget can help you seize control and decide where you want to focus your resources.
Taking control of “bad debts” such as high-interest loans is another key step. In 2023, the APR average is currently around 22.2%; a rate which can disproportionately erode your income over time, if left unchecked. Building an emergency fund containing 3-6 months’ worth of living costs is another good goal for many households. This can help you weather unexpected costs without needing to turn to credit. Another positive step for employees is to invest in their own financial education. The more you know about wealth and finances, the more confident you will feel when making investment decisions and avoiding scams. You will also get more out of meetings with a financial planner or adviser, asking them more focused questions so that you leave with a high sense of clarity and peace of mind.
Consider also building your knowledge and confidence in the art of negotiation. Many people could boost their income and career progression if they had the skills to know when – and how – to ask for a pay rise, or for more benefits (e.g. flexible work hours or locations). Finally, take a stake in your long-term future by planning for retirement. This might involve contributing to a pension from early in your career. This helps you feel like you are heading to a destination that you have chosen and not merely drifting through life.
Conclusion & invitation
If you are interested in discussing your own financial plan or investment strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:
01476 855 585
info@casfin.co.uk
