The challenge and benefits of nurturing mental and financial wellbeing in global employees
Stress and mental-health issues are undermining employees’ ability to perform and could be costing the UK economy more than £4 billion every year, according to a report from advisers Lane Clark & Peacock.
5 April 2022
Financial worries a major source of employee stress
Another recent report by Champion Health found that 30% of employees cited financial wellbeing as a cause of stress outside of work. The Workplace Health Report 2022 suggests that many employees are still struggling, despite the best efforts of organisations.“Money worries have an impact on both an employee’s physical and mental health, which inevitably has an impact on their work performance,” says Laura Dallas, Champion’s Wellbeing Lead. “In these uncertain times, providing financial well-being support is vital from both a moral and business angle.”There is an inherent link between productivity and employee wellbeing. Morale and productivity declines when an employee is dealing with a lot of stress as it has such a huge effect on time and brainpower, says Harriet Shepherd, financial wellbeing manager at financial advisers St. James’s Place.“It’s impossible to ring-fence a period of time outside the working day to mentally deal with financial problems,” she says. “Financial worries don’t go away just because you’re at work.”While it is important to be mindful and understanding of this, it is also important to realise the business impact it has too. Therefore, it is within everyone’s interest for those instances to be reduced and for people to feel supported.Good financial wellbeing a key part of ESG
A key trend which has been accelerating over the past 12 months is a greater scrutiny on the impact that organisations have in terms of their ESG credentials.Instilling good financial wellbeing is not just a ‘good’ thing to do, it forms one of the aspects of a company’s environmental, social and governance (ESG) considerations. The ‘S’ component of ESG covers the relationships that companies have with employees, customers, suppliers and the wider community.“The Covid-19 pandemic also put employee wellbeing higher up the list of issues that investors look at in companies from an ESG perspective,” says Harriet Shepherd. “This means that employee wellbeing is no longer just an internal issue. Companies need to be able to show what they’re doing to support employee wellbeing as they are being held more to account than ever before.”The relationship an employee has with their finances can have a substantial impact on wellbeing. Almost nine in 10 larger UK businesses say they have been impacted by poor employee financial wellbeing, through outcomes such as reduced productivity, loss of talent and more short-term and long-term absences, according to a report by Close Brothers published in March 2019.Financial wellbeing is not just about how much money you have, but also about how secure, confident and empowered you feel financially.“Enhancing financial wellbeing is vital to any company that is committed to supporting the mental health of employees,” says Harriet Shepherd. But what support can a company provide an employee? It’s partly about emotional support, but there is also a practical element too, especially when it comes to building financial confidence and wellbeing.In some cases, it will begin with financial education and equipping people with the tools to manage their finances effectively. “Financial education is also about the effective communication of existing reward packages and making sure that there is a good uptake from employees,” she says.“Employees often need support when making decisions about those opportunities. You only need to look at the number of people still in the default fund of their pension plan. While it will be right for some, more often it indicates that they haven’t engaged with their pension or even their wider benefits package to understand what would work best for them.”More about wellbeing and ESG:
- Marmot Review underscores role of Good Work in Good Health
- New support for whole health of globally mobile populations
- Raising our game on diversity, equity and inclusion
Getting the work/life balance right
As employees return to the office, the balance between work, life, finances and family are throw into sharp focus. Global talent managers, who are responsible for disparate teams in many geographies, have a tricky juggling act trying to respond to differing needs and demands.Yet right now people leaders have an unparalleled chance to make workplaces more productive, supportive, and agile, says Janice Burns, Chief People Officer at learning platform Degreed, an edtech/HRtech company with 600+ global workers and employees based in the U.S, Canada, UK, LATAM, APAC, Europe, and Australia.“In a time of great change, workplaces don’t just consist of permanent, in-office employees but numerous different workstyles in a hybrid set-up,” she says. “This is even more the case for companies with employees based globally, the internal efforts need to reflect the different opportunities, challenges, and perspectives of all regions.”She argues that employees should be given the freedom to fit their work schedules around family, care, and learning commitments, and tailor their work environment to fit their needs and make the company a great place to work. This should be the case no matter the location, while protecting work/life balance and being mindful of different time zones and cultures.“Increasingly, employers are going beyond managing the employee experience to supporting their entire life experience and understanding employees as holistic individuals, with families, hobbies, and other personal lives, will pay off in higher performance, loyalty and retention,” she adds.To reflect the importance of physical and mental health and global wellbeing in the workplace, Degreed’s People team has introduced a monthly wellness benefit of $75 a month (or country equivalent amount). Employees have a wide range of options and can spend the money as they wish on wellbeing services.More about hybrid and remote working:
- What is the bigger picture for wellbeing, global mobility and the future of work?
- Working from anywhere – the hidden implications of cross-border and remote working
- International remote working here to stay
What are the deeper issues around financial wellbeing?
While this sounds good in theory, not all businesses have the inclination or expertise to put it into practice.“Rather than tackling the root causes of the major existing problems, which is unpleasant and requires effort to change processes and systems in the organisation, many employers are swayed by quirky wellbeing providers to implement feel-good initiatives that polishes their brand but are often low-effort and low-impact,” says Chris Priebe, CEO, Zelt, a people management company.“Employees also often don’t understand workplace pensions,” he says. “The result of this is usually that employees end up on pension plans which have bad returns or a return profile not suitable for their age or lifestyle.“The solution for this is to implement better software that integrates pension into the employee system, so employees can see what they are contributing, how they can access it and make choices.”How implementing personal finance education and training can reduce workplace stress
A recent survey conducted by CIPHR on stress in the workplace found that one in five people in the UK feel stressed more days each month than they don’t.A large amount of this stress can be underpinned by issues surrounding financial illiteracy. While employers may not necessarily be responsible for their staff’s personal finance management, educating employees on best practices can be mutually beneficial.“Stress and poor mental health resulting from stress accounts for an increasing amount of absenteeism, so there is a clear benefit for business leaders to integrate financial education in workplace wellness strategies,” says Nick Gold, Managing Director of international speaking bureau, Speakers’ Corner.“Not only will it reduce stress among employees making them more focussed and reliable, but the budgeting and management skills gained from financial literacy can be applied and exercised across many roles.”Read more about the Great Return in the Spring 2022 issue of Think Global People.
To explore more widely the growing importance of wellbeing at work, why not join us on 9 June for the results of the Think Global People and Relocate Awards and the Future of Work Festival?
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