Why financial wellbeing matters – and what can companies do to remove the barriers?
16 May 2019, 12:00
Jeremy Milton and John Heseltine of Mercer discuss the journey many organisations face to alleviate employees’ cash concerns, and ultimately improve their own bottom-line figures.
It is often quoted that change is the only constant, and we have certainly seen a lot of changes over the past decade, from shifting economic landscape, to technological advancements, to the political deviations that have dominated the media. However, among the change, one other constant has emerged.
Money remains at the centre of modern life, and an individual’s financial wellbeing remains an intrinsic factor of their overall wellbeing, stress levels, and ultimately their productivity at work. While the need for positive financial wellbeing remains fixed, recent micro- and macro-economic conditions have led to more employees than ever to struggle with their finances. Mercer found that 60 per cent of UK employees continue to be somewhat or very stressed by their financial situation1.
In addition, Business in the Community (BITC) Mental Health at Work Report 2018, in partnership with Mercer shows the extent of the two-way causal relationship between financial stress and mental health issues, with a staggering 90 per cent of younger employees saying their mental health is affected by the cost of living. Regrettably, the BITC report also shows that more than one-third of the workforce say their financial situation negatively impacts their mental health, but 56 per cent of employees do not feel comfortable talking about money issues at work.
Is that them? Or is it the cultures or programmes we operate?
Well, as only 17 per cent of employees believe their employer supports those with financial difficulties, it appears that for all the directional progress made in recent years, for many organisations culture is still a major barrier.
Overall the current programmes offered appear to have generally done little to remove the taboo and stigma on the issue of finances and support in the workplace – not a glowing end-of-year report.
Implementing financial wellbeing solutions is not just altruistic. Poor financial wellbeing among employees leads to numerous issues that effect productivity, and ultimately, the bottom line. So it’s no wonder an increasing number of organisations are now aiming to ‘build’ and more directly link and promote their financial wellbeing programmes as a more holistic but key pillar within their broader wellbeing strategies.
For those organisations that are starting to move ahead in this space, it has become evident that clearly identifying and actively socialising with stakeholders about where financial wellbeing needs to fit in with their integrated benefit strategies has been key. This creates a more relevant, inclusive, and valued benefit structure.
Other organisations have taken a sharp focus on building financial wellbeing programmes that are closely aligned to the more established principles, frameworks and protocols of their longer established and better developed health (physical and mental) programmes. These organisations are building their future financial wellbeing strategies to deliver a more cohesive, education and prevention- and intervention-based approach with focused development of financial pathways and solution type support offered. This goes further than just implementing the odd tactical solution in isolation – though all journeys start with a single step.
Lessons have also been learned in developing clearer and significantly increased support for employee mental health along with wider diversity and Inclusion, and social policies, which in many cases are being delivered as part of a wider corporate and cultural alignment programmes.
As organisations continue to start – or actively continue – to develop their financial wellbeing strategies, they have increasingly taken steps to introduce better educational based programmes and tools, alongside data and needs-based interventions and financial solutions.
But if the ultimate goal of effective financial wellbeing is to enable employees to not only become better equipped to help themselves through education, but also to create programmes that allow them to take positive actions on the path to improved financial wellbeing then, for all the talk, for improved financial wellbeing to truly become the next workplace change, it is clear that for many organisations there is still a long journey ahead.
Jeremy Milton is the Financial Wellness Leader for Mercer’s UK DC & Financial Wellness business.
- Mercer. Healthy, Wealthy and Work-wise: The New Imperatives for Financial Security. Available at Mercer.com