Many employers invest in their employees physical and mental well-being through benefits such as health insurance and gym memberships. Some employers also provide regular health checks and a company doctor service. Despite these benefits, the importance of an employee’s financial health has yet to achieve similar significance by many employers.
Negative Effects of Financial Distress
The negative implications of employee financial distress has a much wider impact, that often gets overlooked by an employer. The negative effects of financial distress can impact an employee’s work performance, in addition to causing increased absenteeism. Both of these can have a damaging impact on overall staff morale. Depending on the type of business, an employer will need replacement staff for a sick employees’ role, but this is not always possible and can result in tasks left undone or other employees left to pick up the workload.
Research has shown that financial stress is a strong predictor of depression, mental health disorders, and general psychological distress. Further negative impacts identified include increased intake of alcohol and drugs, in addition to poor nutritional intake. These negative effects can result in less productive employees.
The recent pandemic caused many household incomes to fall below the poverty line when they transferred to the pandemic unemployment payment. Although businesses have re-opened, and most employees are back at work, they are now coping with a rapid increase in the cost of living. So how are employers dealing with this? Employers need to be proactive when it comes to their employee’s financial well-being.
Proactive Steps Employers Can Take
Introducing financial education workshops and talks in the workplace is one way to assist employees to improve their financial well-being. Employers should be mindful that financial stress is a subjective experience and one employees perceived financial distress can differ from another’s, even if they have similar income and wealth. This is important as some studies have noted a difference in the levels of financial stress experienced to differ depending on the gender identity. One study I read identified that women reported more depressive symptoms than men when dealing with financial stress. Other research found women to be less satisfied in their ability to handle financial difficulties and meet their long term goals. Also, in my own research and professional experience, I observed more women than men experience mental health problems from financial stress.
The benefits to employers of investing in employee financial well-being
When employers are proactive in assisting their employees to improve their financial well-being, it can help to create a more productive workforce and reduce absenteeism brought about by financial distress. With the commencement of statutory sick pay for all employees from September 2022, taking a proactive approach to employee financial wellness will be of benefit to all, not just employees. The introduction of financial education workshops will also have the added benefit of improving an employers brand and help to reduce staff turnover.
If your business is interested in running financial education workshops or talks, you can schedule a discovery call by clicking this link BOOK A DISCOVERY CALL, or send an email with your details to firstname.lastname@example.org.