Finances: A Holistic Approach to Wellbeing at Work
Looking at the whole person, rather than just their mental health needs, is the philosophy behind holistic approaches to wellbeing.
So many factors play into how we approach wellbeing – age, gender, culture, heritage, language, sexual identity, life experiences, relationship status – which is why zeroing in on a person’s wellbeing without the factors that influence it is reductive.
One area that is often overlooked is financial wellbeing.
The pandemic highlighted the role that finances have on our overall wellbeing, with money worries becoming a more prominent issue.
Beyond the obvious moral case, there’s a business one – those who experience money worries are more prone to absence from work, presenteeism, and heightened stress at work due to using work time to deal with or think about financial matters.
What is financial wellbeing?
Financial wellbeing is the least common area focused on by employers, with only 11% of employers actively focusing on financial wellbeing, compared to 57% that actively focus on mental wellbeing.
Sometimes referred to as ‘economic stress’, or ‘economic hardship’, financial wellbeing has several elements:
– Objective financial status: an individual’s income, assets, and debt – in other words, the quantifiable aspects of someone’s financial situation.
– Subjective financial status: the feelings an individual has regarding their finances, in the present and the future (e.g., fortunate, stressed) which ties in with their objective financial status.
– Financial attitudes and knowledge: an individual’s attitudes towards areas of finances such as credit, budgeting, and their attitudes towards risk.
– Financial behaviour: how an individual manages the financial aspects of their life, particularly credit and debt, paying bills in a timely manner, savings/retirement plans, and spending in relation to earning habits.
Though there is natural overlap between areas, it isn’t guaranteed that, for example, an individual with certain attitudes towards risks will therefore use credit cards poorly, impacting their objective financial status.
All aspects are important, which is why they should all be included in financial wellbeing strategies.
Why does financial wellbeing matter in the workplace?
According to research, almost half of UK workers experienced financial difficulties to some degree.
The challenges of the pandemic have undoubtedly increased the prevalence of financial stress, and the fluctuation around the changing situations is unlikely to alleviate this stress.
For HR professionals, financial wellbeing is extremely important due to its link with employee wellbeing and performance, much in the way that mental health is.
The cycle of financial stress and the broader spectrum of wellbeing can mean that financial stress can cause poor mental health, yet mental and physical ill health can also impact an employee’s ability to work and manage their finances, leading to poor financial wellbeing.
This is the reason why a holistic approach is so vital for employees.
Without access to support for financial wellbeing, it is likely that even if other elements of their wellbeing are addressed – such as physical and mental wellbeing – they will continue to have issues due to the underlying problem of financial wellbeing.
How can you address financial wellbeing in the workplace?
There are key areas when implementing financial wellbeing into wider workplace wellbeing strategies:
– The diversity of the workplace
People at different life stages will have different needs for their level and type of financial support. Family status, for example, links to absenteeism and presenteeism due to financial difficulties.
There are employees who may be more concerned about retirement planning, whereas others might be looking to buy a home, whilst some may be going through relationship difficulties that might also impact their financial wellbeing.
Financial wellbeing has also been related in research to gender, with women experiencing higher levels of financial distress (and as a result, higher levels of absenteeism and presenteeism) than men.
Factoring diversity into your strategy is therefore vital in ensuring it is flexible for employees and the different types and levels of support that they require.
– Offer a variety of channels for guidance
Some people will prefer face-to-face forms of support, whilst others may prefer the confidentiality and convenience of online support.
These channels should be clearly communicated to employees so that they are aware of the options available to them, and can engage with them regularly.
– Financial education
Though research shows that financial education doesn’t have a significant impact on financial behaviour, much of this is dependent on the content, quality and delivery of the financial education.
Educating employees on financial planning and saving, and building financial confidence, can go a long way when tied into a greater financial wellbeing strategy.
Additionally, more technical information around interest and pensions can be valuable.
– Debt/credit counselling
People that are struggling with managing or paying off debt can be supported through debt counselling, which can reduce financial distress and increase positive financial behaviours, according to CIPD.
This may entail supporting an employee in the creation of a debt management plan, or advice around their financial planning (including access to external support).
As with most elements of an overarching strategy, debt counselling is better utilised in conjunction with other forms of support.
It’s all part of a wider culture of wellbeing in the workplace
Without an open, non-judgemental culture in the workplace, support is unlikely to be taken on board and employees will suffer in silence.
Having the right environment to broach sensitive topics is essential, alongside a commitment to approaching wellbeing holistically rather than reducing it to the condition or issue.
Given that so much of our lives revolve around our finances, it’s only right that our financial situation and feelings around our finances are also positively addressed in the workplace.