With the cost-of-living crisis hitting hard, your employees will inevitably be feeling the financial effects, which, in turn, can impact their morale and productivity. It is therefore vital that you do all you can to improve your workers’ financial wellbeing. This will improve both their welfare and your company’s success. Here we look at why financial awareness matters in building a stronger and more resilient team, and how you can boost this to benefit both your employees and business.
The importance of financial awareness
There has never been a more pressing time to help your employees achieve greater financial wellbeing, with recent research revealing that 72% of UK adults are prioritising immediate financial commitments such as mortgage repayments and utility bills over long-term financial goals. A big part of improving your employees’ financial wellbeing is to boost their financial awareness, which, in turn, helps to build a stronger and more resilient team.
Financial awareness is all about being able to successfully grasp monetary concepts such as budgeting, debt management, saving, investing and insurance to efficiently manage finances. Without this, people can suffer dire consequences, such as mounting debt and bankruptcy. It is therefore vital that you help your employees have good financial awareness for their overall wellbeing and happiness.
The importance of ensuring that your workforce is happy should not be underrated, as according to a recent Mintago study, 32% of employees struggle with day-to-day tasks due to financial concerns, with this affecting their workplace productivity. Apart from your duty of care to your team, there is a strong business case for supporting the wellbeing of your employees, and improving financial awareness matters considerably in this.
The benefits of better financial awareness in building a stronger and more resilient team
If your employees have good financial awareness they can understand their finances more fully, which can lead to them making better monetary decisions. This will result in their financial resilience being strengthened, and, ultimately, lead to building a stronger and more resilient team. This is because if your workers are less financially stressed, it can improve their engagement in the workplace.
According to Mintago’s research, 49% of employees say that stress and anxiety harm their performance at work. In fact, it was found that financially stressed workers were almost five times more likely to admit personal finance issues had been a distraction to them at work, and among such employees, 36% were likely to be looking for a new job.
In addition, a lack of employee financial stability can have a knock-on effect on absenteeism, with research finding that as many as 13 million working days are lost each year as a result of financial stress. An effective way to combat this is therefore to ensure that your employees have good financial awareness to strengthen their financial wellbeing.
Empowering your employees with education
Financial awareness matters, and you must therefore take steps to support your team in this area. An essential starting point is to provide good financial education programmes and resources for your people. This can empower them to become more financially proficient and have greater knowledge and understanding to take control of their finances. Knowledge, as they say, is power and in this case, it could not be truer.
With a better grounding in financial matters that play a major role in their day-to-day lives, your employees can navigate modern life better, including the cost-of-living crisis. Research suggests that 33% of employees want more help managing their finances but don’t know where to find it.
Offering useful education is therefore a sensible way to help your employees and subsequently build a stronger and more resilient team.
Such educational resources should include interactive workshops, a comprehensive library of learning materials, podcasts and financial management tools. However, you do need to ensure that these are easily available, so it is important to signpost them clearly to your team, or perhaps make them available on an online employee financial wellbeing portal.
Planning and goal-setting
It is also a good idea to raise awareness of the importance of planning for the future and setting realistic financial goals. Helping your employees plan for the future can not only strengthen their long-term financial resilience but positively impact their morale each day. Recent research found that those who plan for the future are three times more positive about their finances than those who do not. It was also found that 74% of planners said that they were confident in making financial decisions, while only 42% of non-planners felt the same.
Encouraging financial planning for major life events, such as buying a house, having children or retirement can help your team feel more in control of their finances and feel more motivated overall. Your employees’ goals will vary from person to person depending on where they are in their lives, so it is important to help them plan for what they want. You can help them do this by providing access to relevant services and guidance, such as online tools to help them budget, save and pay off debts if that is their goal, or perhaps offer access to qualified financial advisers who can help them develop a bespoke plan to achieve their goals.
You can also help your employees effectively plan for retirement by offering a good pension plan. This can make them feel confident that they are on track to achieve their desired retirement lifestyle. You could also encourage your staff to break larger, long-term goals into smaller, short- and medium-term goals that they can tick off as they achieve them, to keep their mindset positive and their motivation high.
Normalising financial conversations
As boosting financial awareness matters a great deal in building a stronger and more resilient team, a good way to raise this awareness is to normalise financial conversations in the workplace. Talking about monetary matters may not come easily to many of your workers, as speaking about such issues at work has long been seen as taboo. However, only by having open communication on the topic can financial pressures be eased, assistance be offered where needed, and wellbeing be improved.
To get the conversation started and begin building a stronger and more resilient team, send an anonymised, confidential employee survey to find out their specific financial wellbeing needs. You can then use this to provide any relevant support required. However, be sure to emphasise to your employees that their responses will be dealt with confidentially in order to maintain trust.
You should also cultivate a work culture that is supportive of financial issues where employees can feel comfortable talking about money matters. Do this by being reassuring, offering a safe space to talk and providing practical assistance – pointing them in the direction of any relevant resources you offer, or helpful advice such as debt management services. You might also find the annual Talk Money Week event, which takes place each November, useful as a source of information on the subject and a way to highlight to your employees the need for open conversations.
Financial awareness pays off in building a stronger and more resilient team
Ultimately, improving the financial awareness of your employees is vital if you want to build a stronger and more resilient team. In these testing economic times, employers have an important role to play in supporting the financial wellbeing of their workers, and raising financial awareness is a key element in achieving this. In turn, you will gain a more financially stable, happier workforce that boosts your business with greater productivity.
Raising financial awareness to improve financial wellbeing need not be prohibitively costly, but can be a cost-efficient way to help drive business success. By implementing the simple strategies outlined you can make a positive difference to the lives of your employees, your team and your bottom line. With the assistance of a user-friendly financial wellbeing platform like Mintago, you can do this with ease.