Money is often at the forefront of our minds, influencing our thoughts, moods and everyday decisions, yet we generally prefer to keep quiet about it. Our financial circumstances can be a huge source of personal stress, and are often so closely linked to our identity and sense of status that they can lead to feelings of shame and embarrassment if we think they are anything less than perfect. Clearly, money is a highly emotionally-charged subject, and this results in a reluctance to talk about it altogether.
With this in mind, it perhaps isn’t surprising that many workplace wellbeing initiatives fail to incorporate any element of financial wellbeing into their programmes. But this is an extremely important area to address, with countless statistics demonstrating the far-reaching impact it can have on both employee wellbeing and engagement.
How is engagement impacted?
Across different organisational levels, age groups and salaries, the specific roots of money worries may differ, but the resulting harmful effects are much the same.
Stress due to finances is distracting at best and all-consuming at times—consider serious worries about debt, for example. It is not surprising, therefore, that money concerns have been found to detract from employees’ performance. Financial worries also cause sleep problems and can even lead to mental illness, both of which further inhibit employees’ ability to work effectively. Individuals plagued by money stress are likely to struggle to concentrate, make effective decisions and work efficiently, and are more at risk of making mistakes.
Neyber’s report ‘The DNA of Financial Wellbeing’ revealed that almost half of employees feel that financial pressures are impacting their job performance. However, around half of organisations do not consider the financial wellbeing of their employees their responsibility. It seems clear, though, that paying attention to this aspect of staff wellbeing is beneficial at both the individual and organisational level.
Looking ahead, a new challenge for financial wellbeing and employee engagement is likely to arise too. A recent report by the Pensions Policy Institute suggests that up to 12 million individuals in the UK may currently be under-saving for retirement. Whilst many people express a desire to keep working during later life, those who are unwillingly forced to work due to lack of sufficient pension funds are likely to be unengaged and unmotivated—and this will be detrimental to productivity.
What can be done?
Financial wellbeing is not just about giving someone a pay rise or promotion. A large part of improving financial wellbeing is education—equipping people with the knowledge and understanding they need in order to feel confident and in control of their finances, whatever their situation. It is about providing people with the support they need to manage their money, and the opportunity to learn about how they could do this more effectively.
Another common misunderstanding about financial wellbeing training is that it involves telling people exactly what to do with their money. This is not the case either; it is more about raising awareness so that individuals understand what is best for them and can make their own, well-informed financial decisions. Many employees, for example, are simply not aware that making the minimum pension contributions alone is unlikely to provide them with the funds they would like for retirement.
Is financial wellbeing training worthwhile?
When employees feel less pressure from money worries and more in control of their finances, they are not only able to be more present and focused at work, but are also likely to be more motivated as they feel that their employer cares about their wellbeing.
An additional positive outcome of offering such training in the workplace is that it opens up a wider conversation around money and finances—a topic that currently is often treated as taboo. And the more freely people can talk about it, the less it plays on their minds and consumes their thoughts, making the whole subject altogether less intimidating.
Find out about how The Wellbeing Project can help to support your employees’ financial wellbeing here.