Financial worries are taking their toll among employees across the UK and Ireland, impacting productivity, engagement, and retention. So, employers who promote and support employee financial wellbeing will reap significant rewards.

These are the conclusions of an employee financial wellbeing roundtable recently hosted by Zellis. The findings were also confirmed by insights from a recent survey. The study revealed that a huge 77% of the more than 2,500 employees questioned experienced financial stress last year.

Here’s a short clip from the roundtable

Watch the full financial wellbeing roundtable here

Some 54% also indicated that this stress led to a reduction in their productivity levels. The problem is particularly marked among the under-35 age group.

But the issue is not just one of a lack of financial health. This is when people do not earn enough money to cover their needs and struggle to pay the bills.

Why is financial wellbeing at work important?

Emily Trant, Chief Impact Officer for financial wellbeing company Wagestream, said:

financial wellbeing at work Emily Trant

“Sometimes we think about financial wellbeing and conflate it with financial health, which is a component of wellbeing. But it’s not the same as wellbeing, which is [about] getting pleasure out of life, and there’s a lot of people…in the last year who say they’re surviving, not thriving.”

A key point here is the vital role financial wellbeing plays in overall wellbeing. For example, 45% of people who are worried about money lose sleep, which can have negative impact both physically and mentally.

Jacqui Summons is Chief People Officer at United Health Group’s EMIS Health, an IT provider to the healthcare industry. She is also a non-executive director at Zellis.

“A very cyclical relationship exists between all pillars of wellbeing, but financial wellbeing tends to sit in the middle of that,” she explained. “So, I don’t think we can service wellbeing in the workplace properly if we aren’t also looking very seriously at financial wellbeing.”

How does employee financial wellbeing impact productivity?

To illustrate the link between financial wellbeing and productivity, Summons cited research by Barclays. This showed that poor financial wellbeing reduces employee productivity and performance, which in turn impacts the bottom line.

employee financial wellbeing Jacqui Summons

“We can…start to link people worried about money to the creativity, the innovation, the sales, that customer loyalty, all these different measures of a successful organisation. So, we can pretty confidently say that if we stop people worrying about money, if we can get people to feel more control and confidence…in their financial situation, it creates better business outcomes for employers as well.”

Jacqui Summons, Chief People Officer, EMIS Health; non-exec director, Zellis

This is not least because people who experience financial stress believe it generates communication problems and conflict at work (Zellis study).

How does employee financial wellbeing affect behaviour?

Gethin Nadin is Chief Innovation Officer at Zellis and employee benefits platform provider Benefex. He is also an award-winning psychologist and best-selling author.

wellbeing and productivity Gethin Nadin

“If you’re not feeling comfortable, the fact you’re not going to be sleeping well and aren’t as productive will have an impact on your colleagues. It’s not likely just to impact you. It’s also likely to be impacting the team.”

Trant agrees. “[Financial stress] not only impacts your ability to make good decisions. It also impacts your impulse control,” she said. “So, whether you shout at a customer, or take it to wider society and go home and shout at your kids, or whether you make a rash decision about something, it’s really, really fundamental.”

Interestingly, Trant also cited a study by Wagestream, which showed that financial worries can even result in a drop in IQ of up to 13 points.

How does employee financial wellbeing aid retention?

But enabling and supporting employee financial wellbeing at work can make a huge difference, not least in retention terms. Achieving this is not just about providing an appropriate basic salary though. It is also about providing access to appropriate benefits, which include financial wellbeing platforms, such as Wagestream’s.

Nadin explained: “If you’re being delivered something which you’re using in your everyday life and it really makes a difference, it gets to the point of ‘Well, OK, I could go and work for that company and I may get slightly more money, but I really like what’s being provided by this organisation’. So, I think it really does help in terms of retention.”

This is particularly true if employers offer unusual but highly prized perks that give them the edge. He cited one customer that has just started rolling out fully-paid-for private medical insurance for every employee, regardless of salary or position.

“All of a sudden, employees of a certain age or with certain conditions are going to gravitate towards this employer and will stay with them for longer,” Nadin said. “If you work for an organisation that you really believe cares about you, I don’t know why you’d leave.”

How to create a successful and resilient organisation?

Trant agreed but indicated the situation can generate other benefits too.

“If someone’s in pain because they’re waiting on a knee op, it’ll impact their work, so they’ll be grateful if their employer solves the issue and they’ll also be able to work better,” she said. “And when you retain a workforce for longer, you have that increased maturity and increased productivity overall, so it becomes a virtuous circle.”

In other words, if employers are prepared to commit to solving their workforce’s financial wellbeing problems, everyone benefits, including themselves.

“The organisation gets better, the individual employee gets better, and it starts to create a snowball effect. Engagement is boosted, collaboration is boosted. And you start to see that getting this right is a really, really important part of creating a successful and resilient organisation for the future,” Nadin concluded.

employee financial wellbeing and productivity FWB Roundtable

Watch the employee financial wellbeing roundtable

Tune into this insightful roundtable discussion featuring an expert panel of industry leaders in HR, workplace health, and financial wellbeing, exploring:

  • Why should employers take an interest in the financial wellbeing of their people? 
  • What happens to performance and productivity in the face of money worries? 
  • Is flexible pay (earned wage access) part of the solution? 
  • How does financial wellbeing impact engagement and retention? 
  • What’s the role of HR, shared services, and payroll teams?