Sammy is the founder and CEO of YuLifethe life insurance company that provides life insurance, wellness and rewards in one simple app.
In the wake of the ongoing pandemic, our cultural discourse around wellbeing has become more transparent, dynamic and pervasive than ever before. An important feature of this ‘new well-being’ is also financial well-being – the impact of one’s financial circumstances on happiness and a general sense of security – in addition to more widely discussed facets such as physical and mental health.
The growing importance of financial well-being has led many employers to double down on the benefits that ‘tax fitness’ can promote to attract both existing employees and new hires, especially in light of the Great Retirement, where recruitment and retention have become increasingly important . challenging. Accordingly, some workplaces have started taking various steps to improve the employees’ sense of financial well-being by exceeding base salary commitments, i.e. strengthening pension plans, offering better insurance packages and even providing financial coaching.
Such steps bode well for the future of how employers guarantee employee well-being. But how do we know what employees themselves are actually looking for when it comes to their personal financial well-being, and how can workplaces respond to this? Let’s take a look at some key insights that can help employers better strategize their approach to the economic well-being of their employees.
Removing the taboos around discussing financial well-being
A recent survey by YouGov and my company YuLife, which assessed the attitudes of 2,035 adults on these issues, found that four in five people (80%) are currently concerned about their financial well-being, and that figure rises to 88% for parents. In the U.S, PwC’s latest survey of employee financial well-being of more than 3,000 full-time employees found that 56% are stressed about their finances. Given this high level of financial concern, you might expect that honest and candid conversations about how to tackle such problems would help employers devise strategies for dealing with them.
In reality, there is a deep-seated reluctance to broach that sensitive topic: according to the YouGov-YuLife survey, only one in five people (21%) would feel really comfortable discussing financial stress with an employer. According to the TIAA 2022 Financial Wellbeing Survey of 3,008 Americans over the age of 18, one of the biggest barriers to participating in employer financial wellness programs is their refusal to disclose their finances to their employer.
That’s understandable – even when approached with the right intentions, these conversations, long plagued by taboos, can become painful or embarrassing. To mitigate that, employers should adopt a baseline of such support as the default, rather than waiting for employees to voice their financial concerns, which can go a long way toward easing such taboos.
As such, it is the responsibility of employers to engage their employees in conversations about financial issues in a healthy, supportive and discreet manner. Only then can employers proactively design effective financial policies that address the specific needs of their employees and improve their sense of financial well-being.
New expectations for employers
If you’re still skeptical about the viability of such sensitive conversations, consider the following: Nearly half (49%) of our respondents agree it’s an employer statement. responsibility to improve the financial well-being of their employees. This problem is particularly resonating for younger generations – those poised to dominate the workforce for years to come – with 64% of 18 to 24 year olds and 69% of 25 to 34 year olds seeing it as the responsibility of a workplace for a sense of fiscal well-being. The TIAA Financial Wellbeing Survey had similar findings, with 65% of Generation Zers and 61% of Millennials saying it’s a company’s responsibility to help employees improve and maintain their financial well-being.
The takeaway? For those looking for a new job – especially those entering the job market for the first time – additional financial welfare benefits may just seal the deal. Companies that don’t include this in their terms of employment run the risk of losing in the talent rush.
Integrating financial well-being into general well-being policy
Perhaps the most important finding of our research is that a majority of people truly feel that their level of financial well-being influences their performance in the workplace. Around 80% of workers in the UK believe that stress around financial difficulties can negatively impact workplace performance. PwC survey found that 76% of employees who were stressed about their finances suffered a loss of productivity at work.
These findings, while striking, shouldn’t come as much of a surprise: Less worry about money means less stress and more room to make jobs more enjoyable and successful. Therefore, facilitating financial well-being is about much more than attracting new employees or building a positive reputation: it literally improves the ability of employees to do a good job.
The Future of Financial Wellbeing
Rising inflation today makes it increasingly difficult to control the cost of living. With predictions for the continued rise in the cost of living in 2022, 57% of those surveyed already expect their fear of financial well-being to increase in the coming year. Deloitte’s Global 2022 Gen Z and Millennial Survey financial worries topped their list of concerns, with more than a third of both millennials and Gen Zers unsure of being able to retire with financial comfort.
A large number of employees in our survey cited income protection or critical illness coverage as the most important policies a workplace can provide to enhance their sense of financial well-being. Fortunately, these types of financial policies or products are increasingly accessible to businesses and can be an ideal starting point for reviving employee satisfaction and well-being.