Tackling financial stress in the workplace
The 4 main reasons employers are not tackling financial stress in the workplace
In this two-part blog, Darren Laverty presents findings from the Workplace Financial Wellbeing LinkedIn Groups July conference. Darren, founder of the group, and speaker at the event reveals the 4 main reasons employers are not embracing financial wellbeing.
Part one takes a more detailed look at the top two reasons preventing employers moving forward with their own financial wellbeing strategies; why employers do not have the time, budget and resources, and what is preventing them from taking action.
There is no doubt that we all buy into the fact that ‘prevention is better than cure’. It’s why we regularly change the oil in our car engines, it’s why we inoculate against disease. So why is it that employers are not applying this analogy when it comes to employee financial wellbeing?
Maybe they are waiting until the problem is more visible and beginning to impact the bottom line, resulting in reduced productivity, absenteeism and poor retention. I would suggest if it is visible, it’s probably a bit late and employers will be left searching for a miracle cure which could be more damaging and costly.
Some employers believe it is none of their business, and they shouldn’t be ‘interfering’ with the financial affairs of employees. The problem is if they don’t, it’s likely to be their business that suffers.
A few weeks ago, I spoke at the LinkedIn Group’s Workplace Financial Wellbeing Conference.
(Have you joined the group yet? If not here’s the link) Throughout the morning we endeavoured to get to the bottom of why many employers are not embracing financial wellbeing in the same way they might physical wellbeing for example. And for those that understand the need for financial wellbeing, what is making them procrastinate and not take action.
The event was extremely well attended and highly interactive. Attendees rated the event very highly and provided written feedback as to their frustrations and worries in these areas.
The following reasons are the top 4 that the audience said are preventing them from moving forward with their employee financial wellbeing strategies:
1. I don’t have enough time.
2. I don’t have the budget or resource.
3. The leadership team do not buy into this.
4. There are so many options in the market, I don’t know where to start.
Let’s work through these 4 statements one at a time.
I don’t have enough time
We can all identify with this statement! I believe there are two main reasons for this statement being true. Employee financial wellbeing, in the way we’re discussing it now, is still relatively new, making it difficult for employers to know what and who to give responsibility to. I’ll expand.
All too often the responsibility for employee financial wellbeing is not being delegated consistently. It is given to various people within an organisation, from the management, comps and bens, reward, employee engagement and even the Health and Safety department. I believe it need to form part of the benefits package and sit with HR.
In addition, the role of employee financial wellbeing is usually given “on top of” and not “instead of” existing responsibilities which means that there is precious little time to deal with it. And to make matters worse, it is new unchartered territory for many so that they have to find the time to research and learn all about it. As a result it becomes a ‘nice to do’ instead of a business imperative and short term firefighting duties are often prioritised over it. The shame of the matter is, it will become a high priority eventually when lack of intervention manifests itself as a stressed-out workforce.
The real problem is less about ‘not enough time’ and more about priorities which is what needs to be addressed. How much time will be wasted sorting out the problems that could occur if we take action a little too late?
I don’t have the budget or resource
One of the speakers at the conference John Hoffmire, financial literacy expert, lecturer at Oxford and Cambridge Universities and one of the founders of the non – profit organisation The Personal Finance Employee Education Foundation (PFEEF.org) explained that after 20 years of academic research and testing, he has worked out that employers will see at least a 3 fold return on investment for any financial education and/or financial wellbeing interventions they introduce to the workplace.
He explained that for every £1 spent, employers will see at least a £3 ROI and he has a formula to calculate it. He also presented his 1 minute Personal Financial Wellbeing survey which used pre and post intervention and provides a score to work into the ROI formula and a benchmark to track progress.
So the budget/resource excuse is probably only a matter of mind-set where the word “cost” could be replaced with “investment” otherwise zero investment will ultimately lead to much higher cost, the cost that an employer will experience if a significant proportion of your workers are feeling financially stressed out.
As metaphored earlier, it’s a lot cheaper to change the engine oil than to change the engine.
It’s a lot cheaper to inject a vaccine than it is to treat the disease.
If none of that works, I have 5 simple ideas to free up some of your existing employee benefits budget. (Too much text for this blog so email me at firstname.lastname@example.org and I will send you them in reply email)
In the second part to this blog, I’ll discuss the final two reasons employers are struggling to move forward with their wellbeing strategy. I’ll take a look, in detail at why employers are not tackling financial stress in the workplace, plus how to achieve leadership buy in, and where to begin with your own employee financial wellbeing.