Why you should care about financial wellbeing in the workplace

Focusing on physical and mental health is important but what most employers ignore is how important employees financial health is in today’s world.

The majority of European employees live paycheck to paycheck. Almost 100 million employees in 21 EU countries have less than 2 months of savings in their bank accounts.

When we are talking about financial health and wellbeing, we mean the ability to take the right financial decisions, manage financial responsibilities and be able to understand financial concepts or plan responsibly for a future healthy financial status. In other words, it is the ability to pay daily and monthly expenses with ease, repay debt and mortgages on time, be able to plan for future events like weddings, birthdays and vacation or even for retirement.

Other terms can be used to describe financial health, as financial literacy or wellness. Measuring the status of those terms at a European level, we get striking numbers underlining the problem even more. 70% of European employees are looking for some form of?help from their employer?to improve their financial situation. In Greece, 6 out of 10 employees are considered financially illiterate with the situation been worse for women. Another example is Portugal, occupying the last position in the financial literacy ranking of the 19 countries of the euro zone along with Cyprus and Italy.

But why do we think employee financial wellness is crucial even in the workspace?

Research has shown that bad financial health leads to increased stress that impacts both mental and physical health. This inevitably leads to?distraction?and lower?productivity?levels.

Another important factor that should be taken into account is?retention. Employees that feel satisfied at work and have decreased levels of stress are less likely to leave their employer to join a competitor that cares more about them.

Attracting and retaining talent is a bigger problem for employers this year than it was in 2021. The challenge for employers is?how to turn attrition into attraction. Nowadays, employees are part of a different generation and seem to care for more than just higher paid jobs. Holistic support from their employer, value alignment, implementation of new ways of work and more inspiring benefits are some examples of what makes modern employers more attractive and differentiates them from the competition in the war of talent.

Supporting employees to achieve better financial health should become an open discussion in the workplace followed by immediate actions. Setting up new employee benefit programs that are focusing on wellness with multiple ways.

One of them can be flexible pay. The world of work is constantly evolving, so why should salaries stay static? The rising cost of living means that a lot of employees don’t have enough savings to see them through an emergency. Reviewing the wage structure is one way to give employees more flexibility and freedom with their pay, while also showing that their company is willing to adapt to a changing world.

Offering flexible access to wage is key, when combined with a resilient financial background. This can be achieved when employees are financially educated to overpass financial distress and take the right decisions for the future. Financial coaching and guidance in the workplace combined with a flexible pay cycle can lead to a happier and more productive workforce.

Visit?www.paynest.co?to learn more about how you can improve financial wellbeing in the workplace.