A Financially Healthy Workplace
Contributed by Liz Koh
The last five years has seen a transformation in the rights of workers to enjoy a safe, healthy work environment. The Health and Safety at Work Act 2015 requires that workers are given the highest level of protection from workplace health and safety risks, so far as is reasonably practicable.
This includes risk to both physical and mental health. Many organisations provide training and benefits to employees as part of a health and safety or wellness programme. This can include employee assistance programmes which provide free counselling and support to employees, or it may include a wide range of benefits, for example free gym memberships and health checks. While health and safety programmes are a cost to employers, there are benefits including fewer sick days, higher productivity and lower staff turnover.
Historically, health and safety programmes have focussed more heavily on physical health and safety but mental health issues are now seen to be just as important. Stress is a leading cause of absenteeism, low morale and low productivity. The link between stress in the workplace and stress in relationships at home is undeniable and it works both ways. Stress at home can be transferred into the workplace and vice versa.
However, employers have been slow to pick up on one of the biggest causes of employee stress; money stress. Studies around the world have shown that money is one of the greatest causes of stress. It ranks higher than stress from work or relationships. Money stress affects mental and physical health and in turn this flows through to affect work performance and company profitability.
Financial health is the missing link in workplace wellness.
Improving the financial health of employees is no more difficult than improving their physical or mental health. It involves a combination of training and practical support. Enlightened workplaces now offer financial capability training covering basics such as budgeting, debt management and saving for retirement. Free personalised financial advice can be part of a financial health programme, as well as practical support in the form of discounted products and services through group buying schemes (for example insurance and mortgages) and low cost wage advances so employees don’t need to resort to high interest payday loans.
Financial capability training is very much linked to life stages and income level and works best if it is customised to a particular workforce. For younger employees, financial priorities will include paying off student loans, saving a deposit for a house and budgeting. In mid-career, the key issues are mortgage reduction, insurance and retirement savings, while in later stages retirement planning is top of mind.
Money stress can be caused by a number of factors: a traumatic event such as the end of a relationship, illness or death; poor budgeting; or mental health problems which lead to excessive spending. Money stress can cause employees to demand pay increases or seek out higher paying jobs, however if the underlying problems of excessive spending and poor financial decision- making are not dealt with, higher incomes will not lead to a reduction in stress. Worries about the affordability of retirement can lead to older employees choosing to stay in the workplace longer than is ideal for either themselves or their employer.
There are several financial capability programmes available for employers and individuals. The Commission for Financial Capability has developed a workplace programme which is run once a week over several weeks with a different weekly topic. This programme can be delivered by trained facilitators or by employers themselves. Massey University offers courses through its Fin-Ed Centre with a mix of face-to-face teaching and online learning. Industry Training Organisations such as Skills Organisation also provide financial capability resources for employers.
The workplace is the ideal environment in which to bring adults together to improve their financial capability. As financial capability becomes more widely taught in schools, employers can look forward to a more financially astute workforce. However while baseline financial capability may increase over time, on-going support through the various life stages will still be needed to keep money stress at bay.
Liz Koh is an Authorised Financial Adviser and author of Your Money Personality; Unlock the Secret to a Rich and Happy Life, Awa Press. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847.