23 July 2019
If I were to identify the most challenging task the HR department of an organisation has to perform, it’d be ensuring optimal performance from employees, while maintaining a balance between their and employer’s interests. In recent years, I have observed a rise of employee welfare and support programs being conducted by corporations as employers are starting to realise the need to ensure the wellness of their employees, be it physical or psychological. However, it’d critical to look at the financial welfare of employees as well. Why? Because money has always been a major stressor and motivator for people and affects them in many ways.
The relationship between an employer and an employee is perhaps the most complex one of all. It is one based on the mutual benefit of both parties, where money is a critical driving factor. An employer expects the best possible performance while an employee wishes for the best reasonable salary and benefits. Despite this perfect looking arrangement, it is a common finding that many employees struggle to sustain themselves financially. As a result, stress caused by the lack of financial security and stability directly impacts the overall working efficiency of employees.
In the present scenario, financial issues are widely cited as the most common cause of stress among employees. When I came across the report of PwC’s 2019 Employee Financial Wellness Survey, the findings were genuinely concerning. According to the report, nearly 60% employees described financial or monetary issues as the primary cause of their stress. The survey also highlighted that about half of the participants are living paycheck to paycheck, or merely struggling to cover everyday expenses. What’s truly concerning is that PwC’s report is not the only one. There have been numerous other surveys with similar results.
On first look, the lack of financial wellness may seem like an employee issue. However, on a deeper level, the issue is equally of importance for employers as it is for employees. It would not be inaccurate if I say an organisation can function properly only if its employees are working to their capacity. So a large number of stressed employees within an organisation is not a cost-efficient way of running the business. Stress originating from financial matters can make employees unable to concentrate on the job, lead to lack of confidence and morale, increase in late arrival on work or absenteeism all together, indulging in unhealthy activities like excessive drinking, and loss of appetite. All these issues are red flags for employers and require a response on priority.
As per a survey of 1,817 working adults conducted by YouGov for the Chartered Institute of Personnel and Development (CIPD), financial well-being is a crucial component steering an employee’s performance. As the report suggests, one in four workers has acknowledged financial issues as one that impacted their performance at work. Furthermore, one in ten working adults identified monetary issues as the primary culprit behind their lack of focus and inability to decision making, while 19% of the respondents are not able to sleep properly due to their financial problems. Employers must see these reports as a wake-up call, and should start taking necessary steps towards financial wellness of their employees.
As the cost of living continues to surge, we are likely to see an increasing number of financially unstable employees. Another fact that stands before us is that an employer cannot manage the money on an employee’s behalf. However, an employee’s inability to properly manage their money can be problematic for their financial health and can cause stress. To deal with such issues, employers may want to establish proper financial guidance and support programs to educate and help employees navigate money management tasks. PwC’s 2019 Employee Financial Wellness Survey suggests about 88% of working adults seek some level of guidance or advice on their financial matters.
Multiple pieces of research and surveys on employee financial wellness have offered us compelling evidence about its significance in terms of affecting employee performance. This data sheds enough light on how deep the relationship between financial wellness and performance is. Employers must understand that ensuring financial stability and security of their employees will also be rewarding for employer themselves as financially sound employees are less stressed and can work efficiently. Fortunately, many organisations have realized this and have taken the right steps towards handling matter. I’m confident more will join in.