As DPN's Business Development Leader, Michael has extensive experience in the Financial Planning industry and passion for improving clients financial wealth and stability.
What is financial wellness?
Financial wellness is about recognising the importance of feeling secure and financially comfortable. In the same way that we try and look after ourselves through exercise and diet, financial wellness is recognizing the stress caused by a chaotic present and uncertain financial future. An example of financial un-wellness might be workers concerned about not having enough money saved for their retirement or struggling with a mountain of debt.
Why financial wellness in the workplace matters
Financial wellness is not a condition that is often visible. Yet it infiltrates its way through every part of a work environment. Financial stability and security are directly intertwined with productivity. Workers who feel stressed and financially unhappy simply won’t be as productive at their jobs.
Financial wellness impacts small and large businesses equally. Ignoring it is like disregarding a virus in your body. Sooner or later it will affect the health of the whole company.
So what are some of the consequences of financial un-wellness? Let’s look at a few of the results:
Absenteeism: Workers who are stressed and feeling under pressure will be more likely to take time off. They may be moonlighting a second job. Or they may simply get sick more often as the stress impacts on their health.
Presenteeism: This may seem like the polar opposite of absenteeism. In fact, it’s not. It’s a term meaning employees who turn up to work but for all intents and purposes really aren’t there. They’re basically going through the motions and not engaged. Maybe they are even working a second job on the side from the office. Or they spend their time at work worrying about finances and so they’re not really doing their jobs. Certainly you’re not going to see employees with presenteeism display initiative or enthusiasm.
Lack of involvement: Staff members who are unhappy probably won’t feel invested in the business. This may mean that no one is interested in any after work social activities. Or that they’re not going to help come up with strategies to help the business. The ultimate result is that you have a workplace where everyone is doing the bare minimum and not helping to drive the business forward. It also means a workplace made of individuals, which means a lack of collegiality and a culture that’s not team based.
Physical effects: The financial stress will filter into the staff’s physical well being. It can cause insomnia, fatigue, depression, migraines and poor diet. This in turn affects their productivity and attitude whilst at work.
Financial stress in Australian workplaces
A study by the Australian Psychological Society in 2017 found that 24% of the employees surveyed feel financially stressed. Wesley Mission’s survey of 500 households in New South Wales found 44 per cent were experiencing financial stress. That’s an increase of 7% from 2010. Meanwhile The CoreData/Financial Mindfulness Financial Stress Survey in 2017 found 30 per cent of people reported financial stress, and the problem affects all socio-economic groups. That’s nearly one in three Australians feeling financially stretched.
Financial wellness solution
So how do you go about addressing the issue of financial wellbeing in your organisation? Many businesses invest in various financial wellness programs. These have varying degrees of success. There are also direct measures you can put in place to instantly boost your staff’s financial wellness. We’ll look in depth at all the solutions in part 2.