Why is financial wellness so important?

Yoga, mindfulness, fruit bowls and massages are all useful tools to improve the health of employees, but are they really impacting what’s keeping them up at night?

Josh Vernon, Co-founder and CEO of Earnd, cited a recent report by PWC which found the number one stress in the workplace is actually financial stress.

Moreover, employees who lack financial wellness tend to be more stressed, as observed by more than three in five employers (63.3%), according to the Workplace Financial Wellness Index by PWC.

A significant number of employers also noted presenteeism (43.3%), low morale (30%), and absenteeism (16.7%) as other consequences of poor financial wellness.

Flexible workplace practices are not just about diversity of background, gender, race or age - they should also be about recognising financial diversity, Vernon told HRD.

“If you put in place flexible workplace practices for all those other things then there is also an important conversation to be had around financial diversity,” he said.

Consequently, as an organisation it’s important to think about your benefits mix by asking which benefit is going to make the biggest impact on the biggest stressor in your organisation.

According to ANZ’s Financial Wellbeing report, 95% of financially stressed employees, sometimes, often or always ran short of money for food.

Despite the costs of poor financial wellness, only 15.2% of the businesses surveyed had implemented a financial wellness program.

Of those that have, three in five saw an increase in the overall financial wellness of their employees over the last six months. This is six times the rate of improvement of businesses without a financial wellness program.

“We believe that the right thing to do by an individual is to provide them with the tools necessary to nurture their financial wellbeing,” said Vernon."

“If financial stress is the number one stress that your employees face then as employers we have a responsibility to stand up and support our employees, which also translates to better business outcomes."

"There’s an enormous opportunity for employers to leverage new solutions such as early access to earned income and automated savings. These products genuinely improve employees’ financial situations and by virtue of that, employers experience a significant reduction in employee attrition and increased engagement."