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Human Resources : Financial Well-Being

A sense of security goes a long way to boosting employee performance.

In 2015, Willis Towers Watson, a global consulting firm, conducted a workplace survey that connects the dots between an employee’s performance and their financial situation.

Some of the insights shared…

1. Employees’ financial situation is improving but long-term financial worries linger. They feel vulnerable, want security and are willing to pay for it.

2. Employees’ issues are multi-faceted: health, financial and engagement issues tend to cluster.

3. Health and financial issues affect business results through a drag on productivity.

4. Weak engagement on health and financial issues is strongly linked to broader work experience.

5. Employees are in favour of employers being more involved in their health and in retirement saving, but are not certain about financial issues.

Employees were placed in four groups: Unworried, Future Worries, Current Worries, and Struggling.

• Unworried primarily are made up of older employees who are setting aside money as savings.

• Future Worries are those in mid-career who have some difficulty managing debt.

• Current Worries are those younger in age who are able to maintain a systematic savings program.

• Struggling are those like Future Worries in that they are in mid-career, but have greater difficulty in managing their finances.

Negative impact on lives
Although individuals’ perceptions of their financial well-being have improved over the last few years, 20 percent of those surveyed felt that financial worries were having a negative impact on their lives: one in four have concerns about debt, and one in three are worried about the current state of their finances.

Strong links to poor health and time off work were also seen, with the Struggling category reporting nearly seven days lost due to absence, compared to three days on average for those who are Unworried.

Some 78 percent of the Struggling group are experiencing high or above average levels of stress (compared to 32 percent for the Unworried group), and less than a quarter report they are in very good health (compared to over a half for the Unworried group).

Declining quality of work
Employees with money troubles also report themselves the least engaged at work and admit that money worries had a negative effect on their job performance (59 percent of those with Current Worries and 39 percent of the Struggling segment say money concerns prevent them from performing at their best at work).

Financial issues affect business results by their impact on employee productivity, resulting in greater stress and absenteeism and acting as a distraction to employees engaging with their work.

Employees with the most pressing financial concerns were also less satisfied with their pay and benefits and more likely to seek a broader benefits offering. Almost three in five would like to be offered some alternative to pay and bonus.

Retirement plans
Any suggestion that Generation Y individuals place no value on retirement programs is incorrect. Retirement benefits continue to be held in high esteem, with one in three willing to sacrifice pay and bonus in exchange for a much improved retirement or health benefit. Given an allowance to spend on a variety of benefits, the Unworried group said they would spend 48 percent on retirement savings and even the Current Worries would allocate 34 percent.

Employees feel vulnerable, desire retirement security and are willing to pay for it. Retirement benefits remain at the core of the desired benefits package for all groups. The problem is that many young people would consider saving for retirement, however they face other more current obligations like student debt or purchasing a home.

Tailored benefits package
Employers would be wise to ensure their benefit program remains effective and, where possible, is tailored to their short-term and long range needs. Can your existing program be redesigned to bring greater value? Review or implement a benefits program that is in tune with the needs of your employees. An effective approach is to use a regular scheduled meeting as a forum to solicit feedback on which program components are important, and what priorities exist among those who are, or will be, involved. The dual focus of providing a wellness program with a “side” of encouraging employee financial well-being will only come with time and trust. Choose a provider that offers much in the way of value-added health promotion services, supporting employees through each stage of their lives, along with resources that help and encourage greater satisfaction and engagement with their benefits plan.

Review or implement a benefits program that is in tune with the needs of your employees. An effective approach is to use a regular scheduled meeting as a forum to solicit feedback on which program components are important, and what priorities exist among those who are, or will be, involved.

The dual focus of providing a wellness program with a “side” of encouraging employee financial well-being will only come with time and trust.

Choose a provider that offers much in the way of value-added health promotion services, supporting employees through each stage of their lives, along with resources that help and encourage greater satisfaction and engagement with their benefits plan.

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