The financial wellbeing of employees can be crucial to the success of a business – now more than ever as we recover from the effects of the pandemic.
It’s no secret that many workers are currently facing financial problems. But what issues are they facing? And what should businesses do to improve their financial wellbeing?
What’s affecting the financial wellbeing of employees?
Life insurance and pensions company Scottish Widows recently surveyed more than 500 HR leaders from UK firms to find out the financial problems faced by employees during the pandemic.
- Around two-thirds (65%) of HR decision-makers warned that employee financial wellbeing is a critical concern. And they predicted it would become the next big employee challenge for companies.
- More than half (52%) of employees are now looking to their employers for support with increased personal costs due to working from home, personal debt and saving for retirement.
- Four in 10 employees are experiencing increased anxiety and stress due to financial challenges, affecting their productivity and motivation.
- Six in 10 HR leaders (65%) commented that employees are now more willing to talk about their mental health with their employers.
Why is employee financial wellbeing important?
Scottish Windows’ research reveals that poor financial wellbeing causes anxiety and stress for employees. This can lead to poor productivity and motivation. It can also lead to reduced ability to concentrate, poor job performance and absenteeism. These are issues that can significantly impact the success of a business.
Various studies have revealed that workers regularly lose sleep over money worries. Some employees even say that financial pressure affects their relationship with their manager. So, it goes without saying that if the financial wellbeing of employees isn’t a priority, the success of a business could be at risk.
What can employers do to improve the financial wellbeing of employees?
According to the report from Scottish Windows, 54% of HR decision-makers agree that their businesses need to do more to improve the financial wellbeing of their employees. In fact, more than 36% of employers have implemented measures like increasing employer contributions to employee pensions above the legal minimum.
Another 29% are referring their employees to independent financial advisers for tailored advice on financial issues and saving for retirement. This could be an effective way to help employees achieve long-term financial security.
It’s becoming clear that employers need to take the lead in supporting their employees’ financial wellbeing. Graeme Bold, workplace pensions director at Scottish Widows, highlights that employers should implement a ‘financial wellbeing’ policy.
A support system that helps workers build up their financial resilience may also be needed. This will enable employees to focus on their work and contribute more effectively to the business they work for.
However, it’s important that employers understand their employees’ needs first. Creating opportunities for employees to discuss financial issues can help employers. By doing so, employers can get the information they need to best support each worker.
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