The business case for employee financial wellbeing: Insights for Debt Awareness Week
Debt can affect anyone.
The cost of living crisis continues to be a significant problem for many, with debt becoming an issue for some for the first time.
It’s no surprise, therefore, that financial stress is reaching record highs both at home and at work.
So, how can you safeguard your employees' financial wellbeing?
With Debt Awareness Week just around the corner, it’s a timely reminder of the importance of prioritising employee financial wellbeing.
Understanding employee financial wellbeing
Employee financial wellbeing refers to the extent to which an individual feels secure and has enough resources to meet their financial needs, both now and in the future.
For employees, financial wellbeing means:
- They have control over their day-to-day finances,
- They have the capacity to absorb a financial shock,
- They are on track to meet financial goals,
- They will be financially secure once they retire,
- They have the financial freedom to make choices that allow them to enjoy life.
In the context of the workplace, it extends to how these financial aspects are supported or impacted by your policies, benefits, and culture as an employer.
You can contribute to employees achieving these aspects of financial wellbeing by providing:
- competitive salaries,
- benefits like health insurance and retirement plans,
- access to financial education,
- resources that help employees manage their financial lives.
The importance of financial wellbeing support for employees
With 57% of employees reporting they are stressed about their finances, it is clear that financial wellbeing is a huge issue in the workplace.
These figures are not surprising.
The average personal debt in the UK remains almost exactly equal to one year’s average earnings at 99.9% and this year, Citizens Advice reported that they dealt with 48,680 debt issues in January 2024 alone, including making 22,500 referrals to food banks.
It’s no wonder that financial stress can impact your business in various ways, including:
- Decreased productivity
- Increased absenteeism
- Higher turnover rates
In fact, research shows that employees dealing with financial stress cost the UK economy a staggering £120 billion and lead to 17.5 million lost work hours.
Reap the rewards
Investing in financial support for employees can yield significant benefits for you.
- Research by CIPD revealed that 1 in 4 employees agreed that financial concerns affected their ability to do their job. Investing in financial wellbeing can improve employee wellbeing by reducing financial stress and anxiety. Employees who feel financially secure are likely to be happier, more engaged, and more productive at work.
- 40% of employees surveyed by Metlife agreed that they would move to a company that prioritised their financial wellbeing. Providing debt advice as a financial benefit boosts employee retention. Supported employees tend to stay longer, reducing costs linked to hiring and training new staff.
- Financially stressed employees are less productive and prone to errors. Businesses can enhance productivity by offering financial support and resources, helping employees focus and perform at their best.
It makes business sense for employers to provide financial wellbeing support for employees.
But how can you make a difference?
Read on to find out how you can positively impact your employee’s financial health this 18th-24th March during Debt Awareness Week.
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Taking action during Debt Awareness Week
Debt Awareness Week presents an excellent opportunity for you to take action and support your employees' financial wellbeing. Here are some steps you can take:
1. Offer financial wellbeing workshops
With 39% of adults (20.3 million) lacking confidence in managing their money, employers can help by offering workshops on money management and budgeting to fill this knowledge gap.
Simple financial education empowers employees to manage money wisely, equipping them to make wise decisions and helping them reach their financial goals.
2. Provide access to debt advice services
Offering access to debt advice services can be a game-changer for your employees facing financial challenges.
Bravo Benefit’s Personal Debt Advice service provides tailored advice for employees to manage debts effectively.
The service includes:
- Instant online advice
- Transparent processes
- 24/7 availability
- No credit file searches
Contact one of our team to find out how our Debt Advice Service can benefit your employees.
3. Review and enhance benefit packages
When was the last time you reviewed your current benefits package?
We have already seen how prevalent financial stress is amongst adults, and as with every mental health condition, providing appropriate support is essential if you are to get the best out of your staff.
With 1 in 4 workers facing mental health challenges during their careers, Employee Assistance Programmes (EAPs) provide online platforms for immediate mental health support, offering resources and tools to enhance mental wellbeing.
Speak to one of our consultants to find out how easy it is to include EAPs in your benefits package.
4. Foster a culture of openness
Encourage open dialogue about financial matters in the workplace. Create a supportive environment where employees feel comfortable seeking help and advice.
This can be in a variety of ways and it’s important that businesses cater to the differing needs of their employees.
Different ages, and different lifestyles, will all pose a different set of financial challenges for your employees.
This is why offering tailored solutions to meet the needs of your employees is so important.
Promoting financial wellness: The key to sustainable business success
Debt Awareness Week serves as a timely reminder of the importance of prioritising employee financial wellbeing.
By providing financial support and resources, businesses can not only improve the lives of their employees but also reap significant benefits in terms of retention, productivity, and overall business success.
Remember, investing in employee financial wellbeing isn't just the right thing to do – it's a smart business decision that pays dividends in the long run.
Join the conversation this Debt Awareness Week and make a difference in the lives of your employees.
