Luckily it is something that organisations are trying to prioritise. At the recent CIPD Festival of Work conference, we learnt that 74% of businesses now prioritise financial wellbeing. This has increased by almost a third since the COVID-19 pandemic, and the subsequent cost of living crisis. Despite this, employees don’t feel that financial wellbeing measures are the best means of addressing stress and burnout concerns (which are also on the rise.)
We need a way of addressing these concerns, too.
What is financial wellbeing?
According to the CIPD, financial wellbeing can be thought of as:
“The ability to make the most out of their money and finances on a day-to-day basis, while also being able to deal with the unexpected.”
The Money and Pensions Service refers to financial wellbeing as:
“Feeling secure and in control, alongside being financially resilient, confident and empowered.”
When considering the financial wellbeing of your employees, we suggest that you ask yourself the question: ‘Do our employees make the most of their finances and feel in control?’
This helps us to understand financial wellbeing a little more wisely. Consider two people on the same salary:
Person A has sought financial advice, and is completely aware of their monthly expenditures, enabling them to put a portion of their income into savings, and top up their pension pot based on their future retirement hopes and plans. They have a monthly budget assigned to social activities and ‘nice-to-have’ purchases, meaning that they know when to treat themselves, and also when to decline costly, non-essential purchases.
Person B does not track their spending. They find life a struggle and often fall short of money in the days running up to payday. At times they have relied heavily on credit card payments to cover late bills and large purchases. They have not considered their pension and are rarely able to put money into savings as they are struggling to pay the bills. They do not like to let their friends down and will accept every social invitation, until of course their bank balance prohibits them from doing so.
Whose financial wellbeing do you think would be the healthiest?
Who do you think would be the most stressed?
Who would be the happiest?
As this example hopefully illustrates, financial wellbeing can be managed by more than just salary increases alone. A sense of financial security can be impacted by a number of other factors including money management behaviours, mindsets, spending control, education and numeracy levels, and access to good financial guidance.
Why is financial wellbeing in the workplace important?
The cost of living has risen significantly in the UK and across the world since 2022. In the UK, prices of consumer goods and services rose by 9.6% in 2022, which was the fastest growth rate observed since four decades earlier. Consumer prices have continued to rise since, and Bank of England base rates have reached their highest levels since the financial crisis of 2008.
All of these factors have meant that more and more employees are struggling to cope, and the risks of growing levels of in-work poverty (already experienced by one in eight workers) is a significant threat.
When not managed, poor financial wellbeing can lead to mental distress, which, like any form of mental ill health can reduce workplace productivity and morale, contributing to increased sickness absence rates:
- 10% of employees have missed days at work because of financial worries
- Financial worries equate to productivity loss, equating to 17.5 million working hours each year
- 34% of employees say that financial stress or money issues have had a severe or major impact on their mental health
When it comes to financial wellbeing, clearly, there are many factors at play.
Employee fitness benefits for financial wellbeing
When thinking about keeping track of our finances, going to the gym might not seem the obvious solution. But bare with us.
Employee benefits, of any kind can help complement salary, and if effectively utilised can offer a direct financial boost. When an employer partners with Hussle, their employees can access discounts as high as 70% across a huge network of fitness venues. That could equate to savings as high as £1,000 each year, for those with a preference to the higher end venues.
That’s quite substantial in itself.
Fitness benefits, or any incentive focused on health can be especially helpful as they ensure that some of the employee’s overall take home is prioritised towards worthwhile, healthy investments.
Beyond this, engaging in physical activity can have a profound impact on both physical and mental wellbeing. Exercise is of course good for our physical health, reducing the risk of cardiovascular disease, diabetes and musculoskeletal injuries. It’s also a powerful stress reduction tool, so much so that employees who exercise are 46% better at handling stress than those who do not.
Financial worries are one of the leading causes of stress and mental ill health. According to the Mental Health Foundation, money worries are the most common cause of anxiety, and more than a third of UK adults are ashamed to talk about it. Exercise can be a powerful stress reduction tool, for all kinds of worries, and therefore help alleviate the symptoms and challenging feelings associated with financial stress.
Furthermore, fitness benefits can have a synergistic effect upon financial wellbeing by reducing absenteeism, raising productivity and increasing the chances of career success and future earning potential.
One benefit – improved physical, mental and financial wellbeing
There are many employee benefits and financial wellbeing solutions on the market. We certainly can’t claim to cover all bases, but encouraging engagement in fitness activities, through flexible, inclusive, multi-venue access can be a truly powerful tool, with a synergistic effect across three key wellbeing domains: physical, mental and financial.
