However, one issue which is often overlooked is the financial aspect of employee wellbeing. This is likely to become more important as the UK government drives forward its vaccination programme and businesses focus on recovery.
It’s important to remember that fully inclusive wellbeing support for employees should include three core considerations: physical, mental, and financial. Employees suffering from financial stress can lead to pressure on employers and businesses. Anxiety about money can lead to poor mental health which can, in turn, affect performance or lead to absence.
Financial wellbeing isn’t necessarily all about having money in your pocket. It is also the sense of security you feel when you have enough money to pay the bills, with the feeling of financial freedom to make choices that allow you to enjoy life, both now and in the future.
The impact of the pandemic on people’s financial experience has been a tale of two halves for UK employees. Some have boosted their wellbeing by reducing their outgoings and saving more. However, the other half may have found their income reduced or be facing bigger debts following the closure of large sectors of the economy.
Aviva’s latest research – Thriving in the Age of Ambiguity - suggests that changing times may be causing financial wellbeing to decline for many workers – which may call for fresh solutions.
In a recent survey we carried out amongst employees, nearly a quarter (24%) of employees said they had made a bad decision about debt during the pandemic. This rises to more than half (51%) of those aged 18-to-24, dubbed ‘Gen-Z’, with the figure for ‘Gen-Y’ (25-39) scarcely less worrying at 36%.
While not everybody has the same ability to manage their finances successfully, this shouldn’t be taken to mean that employees who admitted to making a bad decision are simply ‘bad with money’. The study’s findings challenge the stereotype that money worries arise from disorganisation or knowledge gaps. More than two-thirds (68%) of employees with poor financial wellbeing think they are organised with their money, and 64% always try to minimise debt.
If the pandemic has taught us anything, it is that an individual’s financial wellbeing can shift in the blink of an eye. When that happens, it doesn’t matter how much support you offer for physical or mental health if it doesn’t take into account the significant impact that such a change in financial wellbeing could have.
The research shows financial factors only account for half (51%) of a person’s sense of financial wellbeing; the rest is driven by other factors, including personality type.
Personality type has a huge influence on individual behaviour, mindset and personal outcomes. Employees who are thriving in adversity tend to be naturally more emotionally resilient and optimistic. Those with less natural emotional resilience regularly experience negative emotions, low financial and mental wellbeing, along with feelings of anxiety and struggle with debt.
The wide variety of different individual experiences during the pandemic leads us to conclude that a ‘one size fits all’ approach to supporting financial wellbeing simply won’t work for everyone.
Three simple ways to engage employees about financial wellbeing
- Make sure employees know it’s OK to talk. In many ways, talking about money is one of the great taboos in our society. Even those employees who talk openly about personal health issues may feel unable to mention the ‘m’ word - money.
Feeling able to discuss issues such as debt and financial commitments won’t make those issues go away, but it could help relieve the stress that they’re suffering from.
It’s important to signpost any services you offer through an effective Employee Assistance Programme (EAP). In some cases, those who have been hit the hardest by the pandemic may appreciate services aimed at improving their emotional wellbeing and that can offer information about difficult financial issues. - Make your workplace benefits work harder. It can be helpful to reinforce your workplace benefits as it’s important your employees know what is available to them. For example, when it comes to workplace pensions, it’s helpful to understand what they’re getting – from you and the government, and the benefits of paying in more than the minimum contribution if they can afford to.
Most workplace pension providers will have ready-made online tools and informative campaigns that can educate and help them stay more connected with their pension. - Tell them, then tell them again and again. By whatever means you communicate, you should never see it as a one-off initiative. Support for employees should be continuous and evolving.
While most would agree it’s been an incredibly tough time, that doesn’t mean it’s been the same tough time for everyone. Talking to employees and finding out about their experience is the only way to help get the right information to the right people at the right time.
Laura Stewart-Smith is head of workplace savings and retirement at Aviva.
