Financial well-being at work: are there secret fighters in your office?

Hannah McQueen is a financial advisor, chartered accountant, personal finance author and founder of enable.me – financial strategy and coaching.

Opinion: Headlines about the rising cost of living, rising interest rates and stagnating house prices cause their finances a lot of worry.

A workplace wellness survey by Employment Hero shows how many Kiwis are likely to be in this camp. She revealed that 62% of Kiwi employees suffer from financial stress and it affects them at work.

Four in five said the impacts of financial stress included things like loss of motivation and loss of productivity at work, difficulty concentrating and making decisions, finding another job or looking for a job. an additional job.

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In these circumstances, workers are advised to ask the boss for a significant pay rise to combat high inflation – and there is nothing wrong with that.

However, it overlooks the fact that beyond a certain point, more money is rarely a panacea for financial stress. Further, it assumes that an employer’s impact on the financial well-being of its employees is limited to the bargaining table.

In my company, we deal with many employers, large and small, and often they say that mental health is the number one concern for their staff, but financial stress is not an issue.

But when we interview their staff, we find that financial stress is pervasive, present to varying degrees in about 70% of their workforce.

The disconnect is likely because money isn’t something you bring up with the boss beyond salary discussions, but it’s also likely because financial stress can disguise itself in various forms.

This could include absenteeism, high turnover, distraction, declining mental well-being, insomnia and even poor physical health – because it’s entirely possible to worry about being sick. This is before taking into account the dynamics of relationships. Whether you and your partner just aren’t on the same page when it comes to money, or you’re single and the responsibility falls on you, both can be stressful.

There are good financial reasons why employers need to be aware of the financial well-being of their staff – there is a well-established link between financial stress, productivity and the bottom line. But beyond that, if we’re going to approach employee mental wellbeing with any degree of sincerity, we need to address the root causes of stress — and financial issues are a major factor.

I’m not suggesting you sit your workers down and ask them about their financial situation, but there is both a need and an appetite for more advice to be made available, in the same way that advice is often made. through employee assistance programs.

According to the aforementioned Workplace Wellness survey, 84% wanted advice on issues ranging from mortgages and budgeting to retirement and investing. Demand for these services was significantly higher among younger workers, while those over 55 were much less enthusiastic. (Since the transition to retirement can be very stressful and few Kiwis are prepared for it, I’d say reluctance doesn’t mean they don’t need it.)

It is on purpose that I speak of “orientation” and not of “education”. While there’s no doubt that financial literacy is part of the equation, I think it’s often seen as a silver bullet when it’s not.

A meta-analysis of all known financial education studies in the US found that execution only improved by 3% immediately after receiving the education – but that drops to just 0.1% a few months later.

A Harvard Business School working paper found there was little evidence that education aimed at improving financial decision-making is successful. He looked at the effect of mandatory high school personal finance courses and found there was no effect on nearly every metric you want to look at.

It’s not that financial literacy isn’t important – it’s just that knowing doesn’t equal doing, so it’s only part of the equation. Improving long-term well-being is about having the confidence to make decisions under uncertainty and achieve different outcomes, not just knowing that you could or should get a different outcome.

As a nation, we tend to prefer the do-it-yourself route in our finances as much as in our home renovations, and we avoid talking about the financial side of the wellness equation. That would be nice – if only this method worked.

Instead, financial stress is pervasive, extending far beyond those whose incomes are simply not enough to cover their expenses.

Employers have a role to play in bridging this gap – for the benefit of their staff as well as for the benefit of their own bottom line.