Unhappy young woman in glasses feeling stressed calculating monthly expenses at home, facing financial problems or lack of money for utility household or rental payments, bankruptcy concept.

Financial wellness programmes and their impact on employee satisfaction

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A 2023 study by the Mental Health Foundation reported that 73% of the population reported feeling anxious about finances and the cost of living ‘at least sometimes’ in the last fortnight.

Financial stress and anxiety don’t just have a negative impact on the personal and professional lives of employees: they can also have undesirable consequences for the organisations they work for. After all, the relationship we have with money can affect every facet of our lives. Meaningfully addressing financial concerns should be a top priority for business leaders, managers, and financial specialists.

What is financial wellness?

No one wants to worry about money. Sadly, it’s probably something all of us have experienced at one time or another.

According to the Money and Pensions Service (MaPS), financial wellness – also referred to as financial wellbeing – is ‘about feeling secure and in control of your finances. It’s about making the most of your money from day to day, dealing with the unexpected, and being on track for a healthy financial future.’

Mental health organisation, Calm, list three levels of financial wellness:

  • Basic financial security. Having sufficient money to cover essential needs and daily expenses, such as food, housing, and transportation.
  • Financial safety. Having relevant financial safeguards in place, such as a lack of high-interest debt, health insurance to cover surprise healthcare costs, or an emergency savings account to help weather unexpected situations
  • Financial freedom. Having enough money to make choices that aren’t based on financial necessity and allow you to live comfortably, such as travel, or early retirement – which offers the greatest peace of mind and better overall wellbeing.

Now we have a better idea of what it is, let’s take a look at how financial wellness links to employee satisfaction and wider organisational improvement.

How do financial wellness initiatives boost employee engagement, satisfaction and productivity?

Financial wellbeing matters because individuals who experience financial wellbeing feel more confident, empowered, and resilient – traits that can have profound benefits within the workplace.

Organisations with high levels of employee financial wellness can expect happier, healthier employees who perform better in their roles. After all, people who are less stressed about money experience better overall mental health and physical health.

Improved employee health often leads to:

  • reduced absenteeism and presenteeism. The Society for Human Resource Management (SHRM) state that financial worry results in a 34% increase in absenteeism and tardiness. Employees who are constantly worried about money may come into work despite feeling mentally and/or physically unwell.
  • stronger professional relationships and a better work environment. Employees who aren’t constantly dealing with financial strain will turn up as better versions of themselves in the workplace. They’ll be more motivated, more likely to work well with others and contribute to a more positive overall atmosphere.
  • increased employee productivity and job performance. By reducing sick days and ensuring team members aren’t turning up to work when they should be off, productivity and quality of work will increase.
  • greater job satisfaction and higher employee retention. When money worries are taken off the table, employees who are more productive, motivated and able to engage meaningfully in their work are likely to experience increased job fulfilment. Organisations can also benefit from lower turnover rates, as team members won’t perpetually be on the look-out for any job with a higher salary.

These financial wellness benefits offer a dual advantage: a healthier bottom line for employees and for businesses.

What are the most effective ways of improving the financial wellbeing of employees?

An article in the World Bank Economic Review states that: ‘financial education significantly impacts financial behaviour and, to an ever larger extent, financial literacy.’

Arranging financial wellness education programmes for employees is one of the best ways to improve financial literacy and pave the way to overall financial wellbeing – whether these are designed and facilitated in-house training teams or outsourced to financial consultants and experts. The World Bank Economic Review goes on to report that: ‘intervention success depends crucially on increasing education intensity and offering financial education at a “teachable moment.”’

Additionally, ensuring your organisation offers a comprehensive employee benefits package can contribute significantly towards alleviating financial strain and employee stress, and fostering a sense of security. Conducting a company-wide wellness survey can be an effective way to drill down into what is truly affecting employees. If money or specific aspects of money management are a common theme, this can be addressed.

What should a financial wellness programme include?

A comprehensive financial wellness programme provides employees with knowledge and tools related to all aspects of money management and personal finances, from savings and investments to pensions and retirement planning.

It may include elements such as:

  • budgeting – such as household and personal expenses
  • credit scores – and how to improve them
  • expenditure – including behaviour and patterns
  • financial insurance
  • financial goal setting and financial planning
  • short-term and long-term finance options
  • debt management, reduction, and elimination
  • loan repayment plans – from student loans to household loans
  • financial crisis and emergency management – for instance, linked to redundancy, unemployment, and bankruptcy.

It may also feature financial coaching, personalised financial counselling and financial health assessments, signposting to relevant financial support services and tools (such as Money Smart, InCharge, and MoneyWi$e), and mental health support and financial stress management.

At their core, financial wellness programmes help employees to make better financial decisions – and boost their financial health.  Remember, the course content and approach may need to be closely tailored to the target audience and their individual, diverse needs. For example, different socioeconomic needs may make some elements of the programme more relevant than others.

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