Inflation may have settled down but people are still dealing with a very high cost of living. Employers can help their staff by offering financial literacy programmes, just as they do health and wellness ones.
“When it comes to wellbeing programmes in organisations, they tend to focus on physical and mental wellness. But physical, mental and financial wellness go together because your financial situation has a huge impact on your physical and mental wellbeing. Studies show that if you’re stressed about money, it impacts on your sleeping, your relationships, all of that,” explains Dawn Bailey, head of financial wellbeing at Bank of Ireland.
The bank’s research has found just under half of us, 49 per cent, say that thinking about our financial situation makes us anxious.
That doesn’t only mean anxiety because we don’t have enough money, Bailey points out; it also includes people who are simply worried about whether they are making the right decisions with the money they have. Financial anxiety cuts across all social demographics, even those who are doing just fine.
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“It’s why it is critical for employers to consider this third piece of the wellbeing triangle,” she says.
There’s a strong element of self-interest in doing so, considering that any anxiety that impacts on an employee’s sleep impacts on their ability to work, and on their confidence, she suggests: “It’s all interconnected, and by supporting employees or colleagues to deepen their financial literacy, it equips them with the skills and confidence to navigate financial opportunities and challenges.”
In theory, that could even help reduce upward wage pressure. “If we’re pretty much at full employment, anything you can do to support your employees is also a key in terms of retention,” says Bailey.
According to the bank’s financial literacy index, young adults aged 18 to 34 show the lowest levels of financial literacy. Bank of Ireland offers a solution whereby it goes into organisations to provide support with financial literacy, with a suite of financial education talks that cover everything from spending plans to savings, better borrowing, pensions and getting mortgage ready, typically through lunch-and-learn sessions.
“Organisations that are serious about this really want their employees to be as financially savvy as possible because they know it will pay off,” says Bailey.
One of the biggest drivers of savvy financial decision making is to understand that it’s not about how much you have, “but what you do with it”, she says.
“It’s a bit like doing a couch to 5k training programme in that the hardest step is getting up off the couch. With this, the hardest part is deciding that you are actually going to start looking at your finances and, if your employer is offering something that can support you in that, to take it.”
Financial literacy is essential for financial wellbeing, agrees Marta Pelc, pensions adviser at Cantor Fitzgerald Ireland. “By understanding basic financial concepts, employees can make informed decisions regarding budgeting, saving, investing, and managing debt,” she says.
She too believes employers can play a crucial role in this process by providing access to financial education resources such as workshops, seminars and online courses. These programmes can cover various topics including budgeting, preparing for a first mortgage and planning for retirement.
“Investing in employees’ financial wellbeing is not just a compassionate move, it also makes good business sense,” says Pelc.
“Financially secure employees are likely to be more productive, engaged and loyal. They are less prone to distractions and stress associated with financial difficulties, resulting in a more focused and motivated workforce. Furthermore, offering financial wellness programs can enhance an employer’s reputation, making it easier to attract and retain top talent.”
Employers looking to implement financial wellness programmes should begin by assessing the specific needs of their workforce.
“Local surveys are an excellent way to gather insights into the financial challenges employees face. Based on this information, employers can tailor their programmes to address the most pressing issues. Partnering with financial experts can further enhance the effectiveness of these initiatives,” says Pelc.
“By offering these services, employers can help employees develop healthier financial habits and reduce the anxiety that often accompanies financial uncertainty. Investing in financial wellbeing is an investment in the future success of both employees and the organisation.”
