It’s currently high on company agendas but what exactly is financial wellbeing?
At Aon, we describe financial wellbeing as “the ability to confidently manage financial life today, while preparing for the future and anything unexpected along the way”.
Can poor financial wellbeing impact an employee’s mental health?
It certainly looks that way with 22% of employees saying that their financial situation causes them stress and impacts negativity on their productivity; financial stress is a key cause of mental health problems2. The issue is circular: people with problem debt are more likely to experience mental health problems, and people with mental health problems are more likely to have problem debt.
Poor mental wellbeing can increase presenteeism and absenteeism, reduce productivity and have a significant financial impact on businesses – latest estimates put the economic cost of workplace mental health at £34.9bn3
As one of the core wellbeing pillars, employee financial wellbeing is a growing concern for businesses. According to the UK Financial Conduct Authority, 67% of employees are currently struggling financially2, which can have a detrimental impact on both their own health and business performance.
Poor financial health will inevitably have an impact on people’s ability to retire. Our latest Global Financial Wellbeing Survey showed that 59% feel they are not saving enough for the future, and 37% of people approaching retirement do not have a plan. A workforce with employees who can’t afford to retire is not just an issue for those employees; it can also impact career progression and may increase the number of employees with poor health – and therefore may increase absence rates.
In our latest Benefits and Trends Survey, 62.5% of companies said they believe employee financial wellbeing is an employer’s responsibility – and the vast majority (98%) stated it’s an area where they’d like to improve engagement.
So, what can companies do to support their employees?
Download Aon’s latest report on the 5 easy steps to support your employees’ financial wellbeing
3Money and Mental Health Policy Institute: https://www.moneyandmentalhealth.org/money-and-mental-health-facts/