Financial Wellness at the Workplace A Key to Overall Employee Well-being

Whenever there are talks about wellness at the workplace, it often circles around physical and mental health. While these aspects are undeniably crucial, an equally important but often overlooked component is Financial Wellness which can significantly impact both physical and mental health, leading to a decrease in overall well-being and productivity.

Therefore, promoting financial wellness, which we fondly refer as maintaining optimum levels of Vitamin M (Vit. Money) among the employees is essential for fostering a healthy, engaged, and productive workforce.

Let's have a look on some interesting figures

• Productivity Impact: Financially stressed employees are 11 times more likely to have sleepless nights, which affects their productivity at work (PwC).
• Health Correlation: Employees with high financial stress are twice as likely to report poor health overall (MetLife).According to a study by PwC, 58% of employees say that financial matters are the number one cause of stress in their lives

• Engagement and Retention: Companies that offer robust financial wellness programs see higher levels of employee engagement and retention. Employees who feel financially secure are more likely to be satisfied with their jobs and remain with the company.
• Poor Awareness: According to PYMNTS Intelligence, 62% of consumers in the U.S live pay check to pay check, including 36% of those earning over $200,000 annually.The report, based on insights from 4,285 U.S. consumers, reveals that nearly half of those earning more than $100,000 per year struggle financially.

SHRM defines Financial well-being "as the state where individuals (employees) can fully meet current and ongoing financial obligations, can feel secure in their financial future, and are able to make choices that allow them to enjoy life"

Employer's role in promoting Financial Wellness

Employers play a pivotal role in promoting financial wellness. By offering resources, education, revised policies and support, companies can help employees manage their finances more effectively, reducing stress and improving overall well-being. Here are some strategies employers can adopt:

1. Transparent Communication: Ensure that employees fully understand their compensation packages, including salary, bonuses, leave benefits and benefits. Clear communication helps employees appreciate the full value of their employment and make better financial plans. To make it easier for all employees to get the message, employers must consider using different styles of communications by including visuals, infographics, customise these communication in different languages wherever required.
2. Financial Education Programs: Provide workshops, seminars, and online resources on topics such as personal budgeting, debt management, and investing. These programs can empower employees with the knowledge they need to make informed financial decisions.
3. Financial Counselling Services: Offer access to professional financial advisors who can provide personalised guidance to employees. This can be especially beneficial during significant life events such as buying a home, getting married, or planning for retirement.
4. Promote Retirement Plans: Offer and promote participation in retirement plans such as superannuation, or pension plans. While enrolment into some of these plans are mandatory, there are also situations where it is optional and in such cases, highlight the importance of starting to save early.
5. Customising Benefits: Generally, employers prefers to provide same benefits for all employees in a particular level to maintain equality.However, certain benefits are not as beneficial for some employees as it would be for others. Benefits like Children's schooling will not be useful for some employees with no kids while they are interested in career development and end up paying fees for such program without employer's support.
6. Educate on Benefits: Offer comprehensive guides and information sessions on how to maximise the use of benefits such as health, life insurance and wellness programs. Employees should understand how these benefits can reduce out-of-pocket expenses and improve their financial health.
7. Earned Wage Access (EWA): Employers can consider introducing EWA policies allowing employees to access their earned wages before their fixed payday. This On-demand pay is becoming popular among employees who face cash flow issues with the conventional fixed pay cycle due to the raising levels of expenses and unexpected situations.

For the Employees

1. Awareness of Financial Wellness:

Like any wellness initiatives at the workplace, the employers can only provide assistance to get knowledge, create awareness and make changes to the policies while getting the maximum benefits from such initiatives rest with the employees. Many employees do not realise the impact that financial stress can have on their overall health and job performance.

Studies have shown that financial matters are the number one cause of stress in their lives, and this stress can lead to a myriad of problems, including anxiety, depression, and even physical ailments such as headaches and high blood pressure.

2. Knowledge About Saving Plans:

Employees participation in saving plans is another crucial aspect of financial wellness.

• Automated Savings Programs: Opt in programs that automatically deduct a portion of your salary into savings accounts or investment funds. Automation makes saving easier and more consistent.
• Emergency Savings Funds: Creating an emergency savings funds to cover unexpected expenses, which can help reduce financial stress.
• Managing Paid Leave Balances: I have often noticed the senior management level employees maintaining an optimum leave balances as they are aware that those leave balances upto certain limit can be either encashed or paid to them as a part of their separation benefits while the junior level employees, who are not aware about this tend to avail all paid leave and in an unlikely event of losing the employment or quitting, will get lesser or no benefits to survive until they get the next opportunity.

3. Planning Expenses:

Constantly seek information on how to effectively plan your expenses can significantly enhance the financial stability.

• Budgeting Tools: Get access to budgeting tools and apps that will help tracking the spending and create effective budgets.
• Workshops on Expense Management: Attend regular workshops on managing expenses, understanding credit scores, and avoiding debt traps. Follow reliable Finfluencers (Financial Influencers) on social media to get generic (not attached to any particular financial product), practical advice on day-to-day money management, tax saving tips which can make a significant difference.
• Upgrading Lifestyle, Yielding to Peer Pressure: Another bad financial practice often followed by employees is yielding to peer pressure and spending with an intention to match or exceed their colleagues' expenses without realising that each one has different financial priorities.
• Upgrading one's personal life too quickly by buying a new vehicle or moving to a new home on higher rental or mortgage or buying unnecessary expensive items as soon as you get a well paying new job or a big salary hike can upset the financial wellness as there are always uncertainties attached with such events and also the percentage of saving in proportion to the earning tend to come down.

• Debt Management: Seek resources and support for debt management, including student loans, credit card debt, and mortgages. Debt can be a significant source of financial stress, and managing it can improve their financial wellness.
• Income Protection: Look for opportunities to get information on income protection products such as disability insurance, life insurance which can provide financial security to you and your family in case of illness or injury or during the unlikely event of your demise.

So the next time, as a responsible employer, while scheduling a Sunrise Yoga session or a Mental Health Awareness program, do not forget to review initiative for enhancing the financial wellness of your team.

Not to forget- The larger responsibility of Financial Wellness is on the employees and hence do not forget to regularly check your Vitamin M levels.