There’s no denying that an individual’s financial position is a deeply personal issue, and it’s likely one they don’t want to share with their colleagues. However, if general concerns evolve into financial stress, that can seep into an employee’s work life and affect productivity.
Alison Gray, founder and director of workplace financial wellness firm Wellthy, says the majority of Australians deal with some form of financial stress during their lives. She shares her tips for creating a more ‘financially well’ work environment.
Definition of financial wellness and financial stress
Speak to a dozen people and you’ll hear a dozen different definitions of what ‘financial wellness’ truly means. It’s easy to complicate the concept, but Alison says it’s actually quite basic.
“When I talk to people about financial wellness generally, I explain that it’s about having peace of mind around your finances, your financial situation and where you’re heading,” she explains.
“If you want to go a bit deeper or use a theoretical model, then there are the three levels of feeling financial well – 1: having some money left over after your expenses are paid; 2: not being stressed about money; and 3: being relaxed about the future.”
That second dimension – not being stressed about money – is often the toughest to manage, and it’s easily exacerbated by lifestyle choices and unsteady income. What’s most worrying is that half of Aussies are living paycheque to paycheque, and a whopping 85% admit to living beyond their means.
“It’s a very widespread issue that affects workers and non-workers alike,” Alison says. “And there’s a range of reasons why. People may be having difficulty with day-to-day expenses and the rising cost of living. Income instability is also common – casual employees and contractors whose income goes up and down all the time can find it hard to plan ahead. And many Australians are in high levels of debt, which can be a big worry for many people.”
Why is financial wellbeing important?
Financial stress can creep up quickly and quietly, and that stress can start impacting an employee’s capacity to do their job if their boss or HR team don’t have a firm understanding of the impact.
“I think many employers are aware of the problems stress can cause in the workplace in terms of a lack of focus, distractions, becoming more prone to errors and accidents, not to mention lower morale,” Alison says.
“However, they may not link stress issues to money because it can be a hidden problem that isn’t readily talked about. It can manifest itself in the same way as other forms of stress at work: absenteeism, low productivity and poor mental health issues generally.”
Alison says organisations need to start addressing the importance of financial wellbeing for what it is – just as they’ve started to adopt relevant policies about mental health in the workplace. By doing so, they can promote a healthier work environment, promote greater productivity and collaboration, and improve their bottom line.
Alison’s 3 practical tips to for creating financial wellbeing in your workplace
To help give businesses a leg-up, Alison has three top tips that employers and HR teams can implement:
- Reduce the stigma: “Normalise financial stress and reduce the stigma around it. There’s a really simple way employers can do that: if they’ve already got materials and resources that talk about mental health and stress, add finances in as one of the causes. People often talk about relationships or work stress yet they are very silent on money. But the research shows it’s the number one cause of stress. By ignoring it, that contributes to employees not being willing to say, ‘I want some help here.’”
- Look inward: “Employers need to look at their own processes and policies around frequency and timing of payments. Personally, I have friends who are casual employees and contractors and it’s not uncommon for their pay to arrive late. But if you’re living paycheque to paycheque, that makes life very stressful. Employers may need to re-evaluate their systems and determine whether they are directly or indirectly contributing to their employees’ financial stress.”
- Take advantage of resources: “Many companies have employee-assistance programs (EAP) with psychology services ‘on tap’ for staff. A lot of EAP providers are now linking up with financial counsellors so that people have access to the right support. In addition, employers can help their staff know where they can access independent and credible resources. Whether it’s the MoneySmart website, the National Debt Helpline, 24/7 gambling help – the tools are out there but lot of people don’t know they exist. This is something an employer can do without incurring large costs or new risks. It’s simply about awareness.”
Deploying a holistic financial wellbeing program
Finally, Alison says employers can benefit from taking the proactive step of actually putting into practice a financial wellness program – one where they offer education, personalised support and even benefits.
“This means looking at their services and HR issues and asking some tough questions – ‘Is financial stress a factor in job performance or employee engagement?’ ‘How can we support our people to be more financially well?
“Many companies that provide their team with health and wellbeing programs online may not know that their existing provider also offers financial wellness elements. So it could be as simple as adding on that optional module.
“Another option is to go further and start offering tailored educational programs or coaching, whether that’s in-person seminars or online.”
Alison admits that like most workplace changes, progress is a slow-moving wheel.
“I think a number of HR people are seeing this is an issue but they’re probably finding it a little hard to convince the more senior players that it’s such a big problem. So particularly senior managers who may be financially comfortable themselves, they may not be aware of the significant level of financial stress amongst their workforce and how pervasive it is in Australia.”
The solution? Education. And Alison hopes Australia will take its lead from the UK.
“There are several workplace wellness conferences in the UK and they all talk about the three pillars of wellbeing: physical, mental and financial. We’re tackling the first two, but we’re only just getting to that third space in Australia.”