Employee financial well-being is not about paying higher wages. It refers to how confident your employees feel about their financial situation and whether they feel they have the skills and knowledge needed to manage their money in a healthy, secure way.
But just like any measure of well-being, it’s a spectrum and can fluctuate at any given time.
But why should employers care about their employees’ financial well-being over and above providing a fair, regular, and secure wage?
Because positive financial well-being is good for employee physical and mental health, and that’s good for business.
At any given time, a good proportion of your workforce will feel anxious about their current and future financial positions, despite feeling that they are doing all that they can.
Financial worries are one of the main causes of stress among workers, causing reduction in productivity through absenteeism, presenteeism and impacting company culture.
Financial anxiety can lead to health challenges such as heart problems, sleep issues and digestive issues.
Anxious or stressed employees are less likely to show up for work meaning fewer hours of productivity and a direct impact on work colleagues who have to pick up an increased workload. This in turn can impact morale and culture.
For many employees, not turning up for work is not an option. They come into work sleep deprived, with their mind on their money worries and it’s hard for them to concentrate on their work. They may spend some time during the day dealing with their personal finance problems.
This leads us back around again: if employees aren’t working well enough because they’re distracted by financial concerns, productivity and morale is impacted – as is the bottom line. Sleep deprived employees can also present a significant health & safety risk.
Company Culture & Morale
In a recent survey by Zurich International, almost 7 in 10 employees in the UAE believe employers are responsible for providing financial wellbeing initiatives.
In the same survey, 91% of employees said that financial wellness programmes are a key factor in staying with their current employer.
Companies that deliver financial well-being programmes for their employees tend to attract and retain talent, building employee loyalty and reducing recruitment and training costs.
Good financial support creates a culture of trust within an organisation; when people know their employer cares about them beyond just getting through another day at work or meeting sales goals every quarter, they feel valued as individuals rather than just another cog in the wheel.
On the other hand, employees that do not feel supported by their employers are more likely to resign. In another survey by Zurich Workplace Solutions about 89% of employees in the UAE say they would switch jobs for the same pay if better benefits were on offer.
Benefits are an important part of your employee value proposition (EVP) — the overall package of what makes your organisation attractive to potential employees compared to competitors who may offer similar jobs or compensation packages.
The barriers to financial well-being
Money worries can range from concerns about lack of savings, retirement funds, childcare and education costs and other family commitments as well as housing, day-to-day living costs and being prepared for emergencies or losing one’s job.
Employees are met with several barriers when it comes to managing their money:
- Low wages and the rising cost of living.
- Too much time, hassle or effort required in finding ways to cut back or find a better deal.
- Can’t afford to get financial advice.
And for some:
- Low financial literacy.
- No or little access to financial products or services.
Employers have the power to address the barriers to financial well-being, empowering employees to feel more in control of their money.
How to support your employees financial well-being
Offering financial well-being initiatives will position your business as an employer of choice, drive employee engagement, increase productivity, reduce absenteeism and lower staff turnover.
Before implementing any programmes, look at your employee’s unique needs and understand their specific financial issues.
- Understand and address your employees’ specific financial issues.
- Provide professional financial education resources.
- Pay a fair salary and be mindful of expenses you ask employees to incur.
- Share information about useful financial products and services.
- Measure your employees financial well-being and keep the conversation going.
Financial inclusion is the first step to financial wellness
In the UAE, migrant workers make up over 80% of the population of the UAE, yet many remain unbanked or underbanked. This is financial exclusion.
This can look like:
- Not meeting the minimum wage requirement for a traditional bank account.
- No access to credit, or affordable credit.
- Higher cost of financial services.
- Exposure to greater risk in managing their money.
- Requiring more time and effort to obtain services such as needing to visit an exchange house to send money home to family.
Ensuring financial inclusion is the first step in any employee well-being programme.
Just imagine, not having access to affordable credit. If you have access to credit, it’s easy to get a loan in case of an unexpected expense. But if you don’t have access to credit, things can get difficult fast.
If you’re low income and need help paying for something like medical bills or car repairs (or even just groceries), short-term loans can be a lifesaver. And yet many people who are struggling financially don’t have access to them- and those who do still struggle with repayment rates that are often higher than those for traditional bank loans.
In addition, people need a safety net when it comes to money- and if they don’t have one, it can cause stress that affects both physical health as well as mental health and work performance.
NOW Money partners with responsible employers to provide access to inclusive financial services for the unbanked and underbanked groups.
NOW Money also delivers a financial education programme to help improve financial and digital banking literacy to improve trust, and help employees feel more empowered in managing their money and more engaged in their work.
NOW Money supports employers with our flexible payroll solutions and provides a Customer Care team for your employees to handle wage queries and banking support.
Find out more about NOW Money flexible payroll solution as the first step in your employee financial well-being initiative.
Financial stress can have a profound impact on people’s lives. It affects their productivity at work and their ability to succeed in other areas of life.
It’s also something that companies can control – and you should take advantage of this power – by prioritising employee wellbeing with programmes that promote financial inclusion and literacy.
By doing so, you’ll create an environment where all employees feel supported and empowered when it comes time for them to manage their finances on their own.
It’s a common-sense approach to helping people succeed at work, boosting your business’s overall productivity and reducing costs. And while it might seem like an expense to your company, it’s actually an investment that pays off in the long run.
Financial wellness is good for business!