Financial wellbeing is becoming an increasingly urgent and important conversation for employers who want to hold on to top talent and attract the best. Financial wellness is an often-overlooked opportunity to stand out with your employer brand and offer meaningful support.
With wallets tightening across Australia due to cost-of-living increases, we are feeling the real impact of financial stress. This is compounded by economic uncertainty like property downturns, volatile investment markets, and the continuing impact of Covid.
A recent study found that the number of Australian workers under severe financial stress has doubled since 2020 with rising inflation and interest rates putting nearly 1 million people under severe pressure and another 2 million under moderate stress1.
Also uncovered through EY and Flare research, ‘Pay in the New Economy’, seven in ten Australians are living paycheck-to-paycheck, with less than $5,000 in savings, and an inability to meet their financial needs in an emergency.
Financial stress carries over into the workplace
Financial wellbeing is an integral part of holistic wellbeing. It can impact both our mental and physical health. When people are in vulnerable financial positions, financial worries can carry over into their work too, impacting their performance.
Stress can contribute to burnout and consume an employee’s emotional bandwidth, and in doing so means that they aren’t at an optimal capacity to appropriately respond to tasks and contribute to the culture of the workplace.
To cope with financial stress, EY and Flare research showed that one in ten Australian employees have chosen to take time off from work. Moreover, these employees have taken an average of eight days off per year to deal with issues regarding financial stress.
For employers, there are very real implications to stress in the workplace — directly or indirectly related to work. It is estimated that stress-related issues cost the Australian economy as much as AU$15b per year, with direct costs to employers’ worth approximately AU$10b through absenteeism or presenteeism.
Financial wellbeing is much more than a salary
Having a comprehensive remuneration strategy or a ‘package’ that includes financial wellness offerings can set your employer brand apart. This encompasses pay, salary packaging, insurances, Superannuation, discount incentives such as perks, mental health support, wellness and lifestyle benefits, and financial support and education.
There are also innovative new benefits like On-Demand Pay that give employers an edge in providing impactful and immediate relief to employees experiencing financial stress.
On-Demand Pay offers employees control and flexibility over access to their earned pay, without charging interest. It can help reduce reliance on high-cost debt products and offer vital support when delivered as part of a suite of financial wellness benefits.
Offering financial wellness as a pillar of your EVP
EY and Flare research highlights that employees are now demanding greater control over their pay and benefits. 55% report COVID-19 lockdowns have changed what they expect from an employer.
Given the impact of stress on productivity, engagement, and wellbeing, financial wellness should be a consideration on the wellbeing agenda for any business.
As financial pressures mount on employees, forward-thinking employers have an opportunity to uniquely position their employer brand in response to attracting and engaging talent.
1 AMP’s 2022 Financial Wellness report
For more tips on how to build a financial wellbeing program, download the Flare guide: How to support your employees financial wellbeing.