Employers’ wellbeing programmes are often designed to safeguard employees' physical, mental, and social welfare, helping to build engagement and improve retention. What is often undercooked, however, is the fourth pillar – financial wellbeing.

A recent white paper, “Getting under the hood of financial wellbeing”, published by New Zealand-based financial wellbeing platform Footprint Connect in collaboration with Umbrella Wellbeing, indicates that nearly 50% of the workforce is anxious, stressed and concerned about their finances. Add to this the murmurs of the general mental health and the Great Resignation.

The white paper lays out the facts and explains why aligning financial wellbeing alongside other wellness initiatives can improve productivity. It also provides context about elevating employee wellbeing on the boardroom agenda, and what board and senior management can do to support and enable their staff.

“We have developed this white paper and created a unique framework using a life-coaching methodology to help employers improve their teams’ engagement, productivity, financial resilience, and wellbeing. When people are stressed about money, they are more likely to report health concerns, exhibit irritability, anger, and fatigue, and develop unhealthy coping mechanisms like smoking, drinking, drug abuse, and overeating. There is a strong link between financial stress, absenteeism and presenteeism, health issues, and reduced productivity,” says Angela Vale, CEO of Footprint Connect.

Vale says money in some places is still a taboo subject. “We want to help bring it into the light and empower people to develop a lifelong awareness of their relationship with money. Numerous surveys tell us employees are stressed, staff retention is a key issue, and the ‘big resignation’ is a thing that cannot be ignored. It is clear that organisations need to review and, in many cases, adapt their approach to work-life flexibility to attract and retain key talent,” she adds.

Kiwis in Psychological Distress

As per the Umbrella Wellbeing Assessment, a fourth of working New Zealanders show signs of psychological distress. When it comes to wellbeing, 20% are struggling, and report not doing so well on multiple aspects of life; more than 50% are doing OK, but not feeling on top of all aspects of their life and 25% of employees are happy, focused, and ‘in the flow’ at work.

Top 3 Most Common Challenges For Kiwi Employees 

The top three most common life challenges for New Zealand employees include financial difficulties (48%), family problems (35%) commuting (26%) and work challenges include workload demands (42%), consultation about change (42%) and lack of manager support (17%), says the report citing Global Happiness Wellbeing Policy Report 2019 published by Global Happiness Council (GHC)

Hidden Cost of Employee Absenteeism

The stress employees go through presents itself in the workplace as increased absenteeism and presenteeism, both of which cost the economy multi-millions each year, as well as affecting the bottom line of most companies.  

A typical employee’s absence continues to cost their employer between $600 and $1,000 per year and the direct costs of absence amounted to $1.85 billion across the economy in 2020, up from $1.79 billion in 2018, the report said citing Southern Cross’ Workplace Wellness Report 2021.

Absenteeism, Presenteeism & Productivity 

Presenteeism accounts for 80% and absenteeism for 20% of productivity loss in an organisation, says the report citing the New Zealand Institute of Economic Research (NZIER) Wellbeing and Productivity report 2021.

Why Employers Should Care About Financial Wellbeing

Wellbeing initiatives may range from a wellbeing allowance, gym memberships, standing desks, vaccination programmes, discounted health insurance, and EAP support, which may include a budgeting service.

The white paper says all have significant benefits to an employee’s wellbeing, but there is further opportunity to provide solutions that specifically respond to the stressors that impact financial wellbeing.

 "Financial stress can be experienced by anyone at any stage of life. It is omnipresent. It can lead to feelings of being out of control and can trigger anxiety, shame, and depression. It stands to reason that financial wellbeing should sit within all employer wellbeing programmes," it adds.

The white paper says a healthy workforce is not only more engaged but more productive. On this basis, there is good reason for employers to consider financial health as a core part of employee wellbeing programmes, not least as a mitigating factor in absenteeism, which comes with a very real cost.  

 The latest Southern Cross Health Insurance BusinessNZ Workplace Wellness Report-2021 shows the cost to the New Zealand economy of people being away from work without good reason amounts to $1.8 billion annually. "Harder to assess is the cost of presenteeism; employees not performing at their best, unable to concentrate and therefore unproductive or simply ‘checked out’. Research in the UK suggests presenteeism costs four times more than absenteeism,” the report adds.

Adding Value to Employer-Employee Relationship

The Covid-19 pandemic has also pushed wellness to the top of the agenda for organisations in 2022. The return on investment on a well-designed wellbeing programme is $1:$12 in a twelve-month period, according to the Institute of Directors.

To achieve these aspirational goals of greater financial wellbeing, mental health, and organisational productivity, an organisation needs to check its approach towards health and wellbeing and see if they are supporting the varied dimensions of wellbeing beyond just physical health.

The white paper says the risk here is that organisations adopt a short-sighted view of wellbeing, leading to an unbalanced employee who may have access to fruit bowls and yoga classes through their workplace, for example, but are not supported with the financial skills to budget for healthy groceries or the resilience to cope through life stress.

“Even more risky is that organisations may invest in one dimension of wellbeing – whether that be physical, emotional, or otherwise – without measuring whether their investment is successful, or whether employees even needed support with it in the first place,” it adds.

Key to the “strategic” part of supporting financial wellbeing, mental health and organisational productivity is identifying what help employees really need, choosing interventions that will make a difference, and measuring their impact so that you can evaluate, iterate, and repeat.

From a financial wellbeing perspective, the white paper says, organisations can best support its people (and therefore the business) by checking in with what they really need, ensuring that financial wellbeing is not left behind in any wellbeing strategy, and choosing interventions that have a demonstrable return on your investment.  

“When they get financial wellbeing right, alongside the other wellbeing dimensions, we reduce presenteeism, bolster mental health, and create healthier businesses and employees. Everybody wins,” it adds.