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Many consider financial matters as personal issues. However, if it turns into financial stress, this can directly affect one's work and productivity, impacting the whole organisation. Every worker's financial well-being is essential in improving their happiness and productivity at work.
The AMP Financial Wellness Report for 2019 data reveals that two in five Australians will experience financial stress in their working lives. This data also shows that 5% of the Australian employees are severely financially stressed, 14% moderately financially stressed, 35% mildly financially stressed, and 46% are financially secure. A lack of financial well-being in Australia causes $31.1 billion in revenue losses in their business. [1]
According to a study by the University of New Sds, pay off debts and cover unexpected expenses with money remaining;
Acting and feeling in control of your finances;
Feeling satisfied with your financial situation, free of concern. [2]
Reasons Why There is a Need to Focus on Financial Well-being in Workplaces Traditional perspectives of wellness which focus on removing health risks by increasing physical activity and promoting proper nutrition are only a part of having holistic well-being. Today, we should focus on having overall well-being that includes the physical and emotional aspects, work-life balance and financial well-being. Financial health and mental health are intrinsically linked as financial burdens cause anxiety and stress, leading to health problems, affecting workplace performance.
Here are 3 reasons why financial well-being is a significant part of an employee's well-being:
Reduces stress and improve satisfaction
Money is one of the main stressors for people, which may lead to arguments about finances with people close to you, sleep problems, feelings of anger or fear, mood swings, fatigue, loss of appetite, and withdrawal. The Australian Psychological Society Stress and Wellbeing Survey found out that debt and negative numbers against a person's name can profoundly impact well-being. [3]
Just like any form of stress, financial difficulties can be a considerable hazard to a person's well-being, and they may come into your employees' work lives unexpectedly. Focusing on financial well-being in your organisation can mitigate this risk.
Increases performance and productivity
Financial difficulties considerably impact productivity regarding the number of work hours lost and absenteeism. Employees tend to spend more time dealing with their finances at work and take more leave due to stress-related illnesses. The study reveals that 37 per cent indicated that employees had missed their job because of a financial emergency. In contrast, another study published found that lack of sleep, financial concerns and taking care of family members are negatively associated with productivity. [4]
Employees' financial wellness in workplaces is a significant factor in the business's growth and performance. If a person is financially secure, they can perform better and contribute more to creating a healthy working environment. On the contrary, employees who lack financial wellness lose focus and are less productive.
Improves engagement and retain top talents
Providing financial wellness support shows employees that they care about them, building loyalty and motivation. When employees feel their employers care about their health and overall well-being, more they are engaged and productive in the workplace. The company will need to spend less on hiring new employees and training them due to reduced turnover and higher retention and engagement.
For employees, having assistance from their employers to manage their finances well and be financially stable in the long term shows them they are valued. Providing support for workers' financial health will encourage them to take the extra mile.
Being proactive in protecting and improving employees' financial well-being beyond just remuneration is becoming an expectation of Australian employees. And research reveals that it can positively impact everyone's work performance and output.
Including financial well-being in your workplace holistic wellness program boosts employees' overall wellness, increasing their health, productivity, and engagement.
If you want to know more about this subject or how to improve your team's mental well-being that's tailor-made for your team and progress you can test and measure, contact us today on 1300 114 818 for a private and confidential conversation email us at info@proactiveaction.co.
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