Employee financial wellbeing will help drive stronger bottom line

Our new ways of working have forced many businesses to adjust how they engage with employees and demanded leaders to communicate on a more personal level, with more empathy, and more regularly than ever before. Engaging with employees to help them to improve their financial literacy and wellbeing is another step forward in this evolution, writes Nick Gower

Financial stress negatively impacts productivity and work performance. Conversely, a financially healthy workforce can have a positive impact on a business’ bottom line. So why aren’t employee financial wellbeing programs more common with Australian employers? And how should employers be investing in employee financial wellbeing in a post pandemic era?

The most inspiring leaders will be those that have, and continue to, put their employers and communities first.

Nick Gower, co-founder at strategic design company, Future Friendly, has worked with some of Australia’s largest employers and corporate regulators designing better ways of working and strongly believes improving and protecting the financial wellbeing of Australians is as important as any other aspect of health and wellbeing; it is a critical and overlooked factor in improving the resilience and productivity of our workforce.

With Australia’s workforce largely relocated to homes across the country during COVID-19, the relationship between employee and employer has changed, boundaries have been pushed and employees are expecting more from their employers.

Playing a proactive role in protecting and improving the financial wellbeing of employees beyond just remuneration is increasingly becoming an expectation of Australian employees and research reveals that it can have a positive impact on everyone’s bottom line.

New starts and younger employees are also likely to have lower levels of financial capability, and therefore, would benefit more from financial wellbeing programs at work.

Financial stress has increased for many Australians, including those lucky enough to still have employment. Despite being more engaged with their finances, financial worry affects most Australian employees and in the last 12 months alone, 73 per cent of Australians experienced financial worry. For 29 per cent of these people, these worries are either daily or weekly.

Increased financial stress in context of a global pandemic is not surprising, but what is not being talked about as much is the impact this worry has on people’s productivity at work, with more than two thirds (62 per cent) of Australian employees admitted to spending an hour a week on personal finances on company time. This is costing Australian businesses a staggering $31.1 billion in lost annual revenue and will continue to negatively affect employee productivity and absenteeism rates, which in turn will impact the businesses bottom line.

Our new ways of working have forced many businesses to adjust how they engage with employees and demanded leaders to communicate on a more personal level, with more empathy, and more regularly than ever before. Engaging with employees to help them to improve their financial literacy and wellbeing is another step forward in this evolution.

Tackling employee financial wellbeing not a one size fits all approach
The incentive for employers to support employees’ financial wellbeing is high, improved financial wellbeing and resilience can mitigate against lost productivity and deliver benefits in the form of more engaged employees and improved connections with colleagues.

Employee appetite for support is high with 70 per cent of workers comfortable receiving information and support from their employer on one or more financial topics according to our research. Australians are most open to receiving information and support from their employer on financial topics associated with the workplace. Information relating to superannuation, understanding tax and planning for retirement are all key focus areas for employees, and there is an opportunity to design workplace financial wellbeing programs that align with these topics.

Young people are more open to and feel they would benefit more from employer support, with 54 per cent of respondents from 18 to 34 citing an interest in a financial wellbeing program, compared to 45 per cent across all ages.

However, it is important for employers to take the time to understand what their employees want and need as financial wellbeing support needs to be flexible to meet different needs depending on the employee’s financial situation.

Some employees want one-on-one support, while others prefer online resources, financial learning that is self-directed or access to workplace seminars. New starts and younger employees are also likely to have lower levels of financial capability, and therefore, would benefit more from financial wellbeing programs at work.

Playing a proactive role in protecting and improving the financial wellbeing of employees beyond just remuneration is increasingly becoming an expectation of Australian employees and research reveals that it can have a positive impact on everyone’s bottom line.

However, an understanding of employees and their needs does not come without first establishing trust, as employees are less likely to share personal financial worries and seek support from their employees and managers without this. Ensuring that frameworks exist to protect the privacy of employees and that the actions and behaviours of workplace leaders build a respectful and trusting culture is key to understanding what support systems employees need.

Conclusion
Now more than ever, businesses and leaders are being increasingly judged on how they have responded to and prioritised their employees and the communities they operate in during this pandemic.

The most inspiring leaders will be those that have, and continue to, put their employers and communities first. There are opportunities to focus on work related topics, building trust and younger staff, but there is still much to explore if we want to rewrite the employer-employee contract of care.

Top tips for employers looking to encourage financial wellbeing:

Be flexible: Understand every employee has different needs and concerns based on their career and life stage, encourage open and honest conversations between managers and employees about what information and support they are looking for and provide information across a mix of channels and formats such as online resources for self-directed learning, workplace seminars, and one-on-one support

Tailor information for employee segments: Support new starters and younger employees – who generally have lower levels of financial capability – by introducing programs in the workplace that build financial capability in these segments.

Establish and engage trust to effectively engage employees: Trust is foundational in all relationships, the employer/employee one being no exception. Employees who have close relationships with their manager or co-workers are more likely to trust them to treat their personal and financial information with respect and care.

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