How to improve your employees’ financial wellbeing

By Dean Perlman | 16 Nov 2020 View comments

It is critical that employers are having open dialogues with their employees to monitor both mental and financial wellness. 

In PwC’s recent 9th annual Employee Financial Wellness Survey (a US based survey taken during the pandemic) the findings revealed employees are unprepared for an extended economic downturn or recession. 

Many employees are already in a fragile financial state and unprepared for short-term cash needs, lacking the ability to absorb even a minor shock. In fact, more than one-third of full-time employed Millennials, Gen Xers, and Baby Boomers, had less than $1,000 saved to deal with unexpected expenses [source: PwC’s 9th annual Employee Financial Wellness Survey].

It is therefore of no surprise to learn that ANZ Australia’s 2018 report (considering standard stresses facing employees) found that active saving behaviour was a key influence on financial wellbeing.

These results will clearly be exacerbated given the economic and social impact from Covid-19. Adopting this behaviour improved financial wellbeing. The survey results illustrate the association between active saving and higher levels of financial wellbeing. 

Many of the large insurers (life, income and trauma) we deal with advise they are more concerned about long term trauma claims that will arise from the severe downturn that some industries are facing, the extended lockdowns, with inability to see families (both local and abroad).

At Charter Finance, we have seen quite interesting swings from different households. Homes with families seem to be saving more with less discretionary spending and those households with singles or couples, have actually had an average increase in discretionary spending, mainly from online shopping, in part due to boredom factor of being stuck at home.

Research from Workplace Super Specialists Australia (WSSA) finds that “employees who lack financial wellness tend to be more stressed, as observed by more than three in five employers (63.3%),”.

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

How to incentivise your employees 

This year has brought on no shortage of stress for both businesses and staff alike. With people being stood down or laid off, pressure on wages, it has been stressful for employees and business owners alike.

So how do we incentivise staff and keep up office morale during these unpredictable times?

Generally speaking, there are two main types of incentives in the workplace being compensation incentives and recognition incentives (an easier and yet meaningful one to implement in this environment).

Compensation incentives includes items such as: 

  • raises
  • bonuses
  • profit sharing
  • signing bonus 
  • stock options

Recognition incentives (incorporating corporate culture) can be vast and wide and include simple actions such as:

  • praising employees
  • yoga and gym memberships
  • team lunches
  • cooking demonstrations
  • massages,
  • education 
  • mentoring
  • volunteer days
  • matching of donations
  • extra day off 

We’ve come across many of our employer partners who offer a lot of these recognition incentives during lockdown (more so Melbourne based businesses). Some of these incentives / activities have been a lot easier and cheaper to implement utilising Zoom (one business last week had a magician and cocktail making classes (having pre-delivered some ingredients to their staff).

Another way to help them with their financial health and wellness which in turn improves workplace productivity, is to look at a mortgage mapping program.

Typically a staff member will only move / refinance their mortgages if it makes financial sense to do so, and it can often provide substantial savings to the employee over the life of the loan.

Becoming financially independent is a goal for most employees. The banks however set borrowers on a repayment treadmill, but do not provide their clients with the tools and mechanisms to build their wealth through their property.

So when incentivising your staff, if you are concerned about your cash flow, think outside of the box. Consider what do your employees need? How can you help them? What will help them maximise their income and take pressure off them and their families.