The importance of financial wellbeing.

Employee’s mental wellbeing has been moved up the agenda for senior leaders in recent years. 84% of organisations have increased their focus on mental health, but only 23% reported an increased focus on financial wellbeing, with the majority signposting people to external sources.

Mental wellbeing

Mental health has been a major focus for organisations in recent years but has been brought to the forefront since the pandemic hit. The Office for National Statistics found that depression has increased in adults to 21%, up from 10% before the pandemic hit. Organisations have had to ensure remote employees aren’t overworking and provide better access to mental health support in case their employees need it.

CIPD found 84% of organisations have increased their focus on mental wellbeing in response to the pandemic. Not only does this focus ensure a better work/life balance for employees, but it also allows organisations to understand and identify any areas of the business that cause employee stress. From this, organisations can change any processes to ensure employees feel more comfortable, boosting engagement by providing a better working environment and a positive culture.  

This is critical for organisations in the current market where candidate shortages are leading to a huge growth in skills gaps. Supporting mental health and making employees feel valued is a powerful way to improve employee retention.

Financial wellbeing

While mental wellbeing is improving within organisations, financial wellbeing is being left behind. Financial wellbeing is described as having control of your money: you can pay your bills, deal with the unexpected, and have a healthy financial future.

Poor financial wellbeing links directly to mental health. 40% of employees state money worries have caused them stress, costing the UK economy £120.7 billion per year, and 19% have lost sleep worrying about their finances. Despite so many employees suffering from finance-related stress, only 22% of organisations consult with employees about whether their current benefits are supportive of their financial needs.

Creating a financial wellbeing strategy helps support your employee’s overall wellbeing. You can tailor your financial offering to ensure your employees are getting the most out of the tools you provide. These could include:

• Access to financial advisers
• An employee assistance programme
• Early pay access
• Providing employees with transparent pay and benefits information
• Check-ins
• Signposting to external sources
• Online budgeting and savings calculators

For example, iTrent and Wagestream’s integration helps to provide financial wellbeing for your employees, giving them early access to 50% of their earned wages instantly throughout the month. This provides a lifeline for any unplanned expenses, ensuring your employees have more flexibility to build financial resilience. Wagestream also provides tools such as budgeting calculators, payment reminders, and financial learning courses to make your employees’ money go further.

A financial wellbeing strategy isn’t the only thing organisations need to focus on. Payroll is a big factor when it comes to your employee’s financial wellbeing, with incorrect or late pay leaving employees in distress.

Research carried out by MHR found that 61% of employees have been impacted in multiple ways due to payroll errors. 22% of respondents said they could barely afford to buy food, whilst 25% couldn’t pay essential bills. The stress associated for individuals going through this is astronomical. It causes employee health and productivity to be affected in many ways, including loss of concentration, absenteeism (8% of the UK workforce have taken time off work due to financial stress), and short-term decision making which can badly affect your organisation’s performance.

Improve part of your employee financial wellbeing through an accurate and efficient payroll solution that supports you with 99.99% accuracy.