Financial worries have long been linked to performance and mental health issues in organisations across the globe. According to a report compiled by the wellness platform Nudge, 4 out of 10 employers confirm that the increase in stress due to financial difficulties among their employees – most certainly linked to the Covid-19 crisis – had a negative impact on their business in 2020.
There is a direct link between employees’ financial worries and their performance, engagement and absence. World leader in consulting and brokerage Willis Towers Watson shows such results in its latest survey. Here are the highlights of the survey:
- 41% more absent than employees without financial worries
- less motivated than those who have no financial worries (51% vs. 29%)
- less productive than those who have no money problem (32% vs. 5%)
So creating financial health does more than relieve current stress, it lays the foundation for a stable and secure financial future.
Fundamentally, financial health measures the ability to meet financial needs and prepare for contingencies. When we talk about financial health, we refer to everything related to credits, debts, mortgages, savings management, pension funds, retirement savings, etc.
When we know that more than one in two (50%!) working age adult report that they have ‘just enough’ to live – without counting Millennials who are more than 60% to suffer from stress due to worries about money – we realize that the problem is bigger than it seems.
Additionally, with COVID-19 crisis, financial health has come to the top of the agenda for most employees. That’s why it’s the right time for employers to make this subject an integral part of the employee health and wellbeing strategy.
Add to this the findings of the 2018 report created by the CIPD in London, titled: Employee Financial Well-being: Why it’s important, which shows that poor financial health is a clear and present danger for employees, employers, economy and society.
What can companies do to cover this topic ?
The main question to ask yourself, even before thinking about what to do, is how far should you go to provide assistance on this topic. Indeed, we can imagine the disastrous scenario where the employee – who has been advised by his employer on retirement or financial management questions – sues the organization after the advice received has not worked. And we can add the fear employees may have of breach of confidentiality on a subject as personal as the state of their finances. You can imagine that an employee who is already reluctant to provide personal data about their state of health (physical and mental) will have even more difficulty in sharing the state of their finances with their employer. Several polls show that most people prefer to talk about death rather than the state of their finances (!).
So it’s the employer’s responsibility to offer information and advice without taking sides, respecting total confidentiality, and above all without going too far in the role of financial advisor. The important thing is also to make the subject less taboo. And yes, it is possible to do so. Here is how:
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Offer an employee assistance program (EAP)
Most EAPs offer financial advice to employees on a completely confidential and anonymous basis as the service provider is completely independent. The credibility of EAP services relies on confidentiality and data protection. I had the chance to see usage reports from different EAP providers I worked with in the past few years (LifeWorks by Morneau Shepell, Optum, Icas EAP), and queries for financial issues are always on top of the list. There is indeed a real need and the role of the employer is to provide this type of support.
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Offer seminars, live webinars, and online information on the subject
In the area of financial wellness, as in all other areas of the 4 pillars of health, a solid training on the fundamentals is necessary. It should start with a basic understanding of what financial wellness involves, either through an online platform with financial resources or during workshops, conferences or webinars on the topic. These topics can be either part of “generalist” seminars, covering all financial topics, or the employer can offer one seminar per topic depending on the interest and demand from employees. Ideally, a high-quality financial wellbeing program should consider the different demographic strands. Financial needs change at different life stages. And if you are wondering how to find out what would interest employees, you have two options:
1. Ask them directly via a survey
2. Ask your EAP provider the main reasons your employees seek financial advice
Research shows that financial wellbeing is a major factor in employee performance and productivity, and therefore in organisational effectiveness. I believe that a meaningful and tailored financial wellbeing program is not an extravagance, it’s a business imperative.
