Why your employees’ financial fitness is good for you

We all understand how a person’s health and wellbeing in all aspects of their life affects their happiness and performance at work. 

Looking after your physical fitness, having a good diet and taking care of your mental health are essential to staying well and getting the most out of life.

Any stress in our lives can affect our general health and how we feel. Financial stress can greatly impact our physical and mental wellbeing and every aspect of our lives.

A global survey found that 81% of people found their goals easier to achieve when their finances were in order. 

Good finances can always provide more means and options, but there’s more to it, as 70% of the people surveyed reported that good financial health had a positive impact on their physical health. 

Feelings of wellness flow into work life. 

Like any stress, employees who struggle with financial stress are likely to experience decreased productivity, increased absenteeism, and lower job satisfaction. 

So, there’s a flow-on cost to a workplace’s performance, not to mention the culture. 

Helping your employees with their financial fitness is essential if you are committed to the holistic wellbeing of the people on your team.

What is financial fitness?

Financial fitness is a person’s ability to manage finances well, make informed decisions and maintain financial stability. 

In the same way that you need to exercise regularly and stick to a good diet to maintain physical fitness, financial fitness requires some discipline, understanding, and planning to make it happen.

According to a study by the American Psychological Association, financial stress is a significant contributor to overall stress levels, with 72% of adults reporting feeling stressed about money at least some of the time. 

Why financial fitness matters in the workplace

Companies have a lot to gain if their employees are financially fit.

Financial fitness can significantly reduce employee stress levels, leading to improved mental health and overall wellbeing. 

Financially secure people are less likely to experience symptoms of anxiety and depression. 

This leads to increased productivity as they can focus on their work better and perform at their best.

So, by helping to reduce financial stress, employers can create an environment and culture where people can thrive.

When an employee feels confident in their financial situation, they are more likely to feel satisfied with their job and remain loyal to their employer. 

This can lead to higher employee retention rates and a more positive workplace culture.
 

It’s testing times for financial fitness

Right now, almost everyone’s financial fitness is being put to the test. 

The current cost of living crisis, rising inflation and interest rates have affected individuals and businesses and are creating financial stress for many people. 

More than half of Australians (56%) are reportedly just making ends meet or failing to do so.  

And Lifeline reports that one in four Australians are finding it hard to get by on their current income.

In 2022, just as we were coming out of Covid, an Australian study found that financial stress had doubled over the previous two years. 

It also stated that financial stress has a damaging effect on employees’ productivity, reduces their willingness to innovate, and worryingly reduces their attention to safety in the workplace. 

The study found:

• 21% of employees admitted their productivity had fallen as a result of financial stress
• Over 12 hours a week were lost to stress-related absenteeism and lower productivity due to financial stress
• Young people aged between 18 to 29 were the most affected by financial stress
• Workers with financial stress were less safety-focused, with 15-20% of workers saying they paid less attention to safety and risks
• People nearing the end of their working lives who couldn’t afford to retire due to financial stress were staying ‘on the job’ and taking a salary but with low motivation, morale and productivity

Most importantly, it found a clear connection between financial stress and unhappy, unmotivated workers. 

The happier and more productive workplaces are those where more workers feel financially secure.

Tips for managers to promote financial fitness

To help foster a happier and more productive workplace, you can try some of these strategies:

• Offer financial education workshops - Provide opportunities for your employees to learn about budgeting, saving, investing, and managing debt through workshops or guest speakers
• Provide access to financial resources - Offer access to financial planning tools, resources, and counselling services to help employees make informed financial decisions
• Promote retirement savings - encourage employees to add extra to their superannuation when it’s possible
• Offer flexible work arrangements - Give your team the flexibility to adjust their work schedules or work remotely to save on commuting costs and improve work-life balance
• Start financial wellness programs - Partner with finance companies to provide programs focused on financial literacy
• Provide employee assistance programs (EAP) - Offer EAPs that include financial counselling services to help staff address financial challenges and develop strategies for improvement
• Recognise and reward financial goals - Acknowledge and reward employees who demonstrate good financial habits and achieve financial milestones
• Talk about it - Create a supportive environment where employees feel comfortable discussing financial concerns and seeking guidance from managers or HR
• Offer financial incentives - Consider offering financial incentives such as bonuses or profit-sharing programs to reward employees for their contributions and help them achieve their financial goals

In short, when you make financial fitness a priority and support your employees and empower them to feel in control of their financial futures, you can create a happier, healthier and more productive workplace.


Sources

1. Apis - The convergence of financial and physical wellness, a new paradigm
2. American Psychological Association. (2019). Stress in America™: Stress and Current Events.
3. RearchGate. Garman, E. T., Leech, I. E., & Grable, J. E. (1996). The Negative Impact of Employee Poor Personal Financial Behaviors on Employers. Journal of Financial Counseling and Planning, 7(1), 157–168.
4. Pursuit – University of Melbourne. More than half of Australians are only just making ends meet
5. AMP - Financial Wellness

The information contained in this article is for educational and informational purposes only and is not intended as health or medical advice. Always consult a physician or other qualified health provider regarding any questions you may have about a medical condition or health objectives.