Why financial wellbeing is the essential boost to your business

Money worries are a growing matter of concern amongst the workforce. This, however, isn’t just a matter of looking after your employees wellbeing. The knock-on effect of poor financial wellness is causing decreased productivity in the workplace, costing employers billions in losses every year. Committing to making financial wellbeing a priority is mutually beneficial to both parties.

Financial worries and productivity 

The reality is that employees’ financial concerns have a significant effect on workplace productivity. Peoples Management’s 2019 survey shows that 77% of employees feel that money worries impact their ability to focus.

We already know that stress and anxiety can have a huge impact on our behaviour, so it’s no surprise that if financial concerns are weighing over employees during the working day, this will undoubtedly decrease productivity in the workplace. In fact, one in four employees (25%) report that these concerns are so severe that it impairs their ability to work effectively at all.

Neglecting Financial Wellbeing is Bad For Business

The DNA of Financial Wellbeing’s 2019 report shows that neglecting financial wellness in the workplace incurs significant costs for the employer. Each year, employers across the UK lose an estimated £15.2bn because of employees’ poor financial wellbeing. Research also shows that addressing the problem could even boost GDP by 2.4%. Ultimately, employers are bearing the brunt of their own lack of financial wellbeing solutions.

This is a widespread issue – with an overwhelming 89% of larger UK businesses thought to be impacted by poor employee financial wellbeing. As well as decreased productivity in the workplace, financial stress-related absenteeism and high employee turnover also plays a part in this concerning trend:

  • 1 day lost each year per employee due to decreased productivity
  • 2.5 days lost each year per employee due to financial stress-related absences
  • £20,000 in estimated recruitment and training costs for each resignation ‍

The Wellbeing Triangle

Unfortunately, this is not surprising. While employee wellbeing initiatives are on the rise, financial wellbeing is the least nurtured out of mental, physical, and financial. This is concerning when we consider that all three are connected; leaving financial wellbeing unaddressed can lead to detrimental consequences for your employees’ physical and mental health too.

Despite the financial impact on businesses, only 56% of employers felt they could agree that their organisation was providing enough support for employees’ financial health, proving we still have a long way to go. 28% of HR professionals polled said employee mental health was one of their top three priorities. Only 4%, however, reported financial wellbeing as a major focus.

As Jeanette Makings, Head of Financial Education Services at Close Brothers reports: “Money worries don’t just affect an individual’s financial health; they are one of the single biggest causes of stress, affecting mental and physical health if left unchecked. They are also an issue for businesses with lower productivity, higher absenteeism, and higher staff costs, which hurts business performance. Doing nothing is no longer an option,” she said.

Accessible Financial Wellbeing Solutions

The good news here is that while this places responsibility on the employer to take action, it also tells us that there are clear steps we can take. Implementing sustainable solutions to help your employees work towards financial wellbeing is one of those rare win-win situations. It will benefit both parties in the lung-run and could help you scale your business.

Research found that employers lose the equivalent of 8.3% of the salaries of those aged 18-29 as a result of poor mental health. This shows the impact that poor employee wellbeing can have on the financial success of your business. Furthermore, research shows that mental health concerns currently affect around 1 in 6 workers. This costs employers about £2.4 billion a year. Since financial struggles are a major factor contributing to poor employee wellbeing, businesses must prioritise financial wellbeing. They must ensure that productivity within their workforce does not suffer.

Providing employees with the education and support needed to boost their financial wellbeing will have a positive impact on businesses. Ensuring that employees have the knowledge required to manage their finances effectively is one way to benefit in the long-run. Employees are likely to take less days off due to financial stress and can focus more on their tasks and supporting the growth of  the business.