Wellness has been a key buzzword in the corporate world for a long time, and increasingly more so since the pandemic. As lockdowns and restrictions impacted employees’ health, employers sought to implement or add to existing programmes that would help employees manage their mental and physical wellness.
However, there is another area where employers could be assisting their employees and that is “financial wellness”. Financial wellness is a holistic approach to finances beyond compensation and can encompass anything from providing guidance and insight on day-to-day finances, to helping employees better understand their benefits packages.
Munro O’Dwyer, partner, PWC, says, “How would we see financial wellness is not a protection or saving product or putting money aside for funeral or a pension.
“It’s about taking simple behaviours every day that improve your resilience, your security, and your peace of mind about your finances. It’s not about how much you have. It’s about being comfortable and secure in your financial position.”
Davin Convey, HR business partner, Euronext, says it’s important to clarify that financial wellness for employers is not about how the company is compensating its staff. Instead, it is about “how they can play a role in ensuring staff are educated and informed about how to get the best out of their money or what avenues are available to them to address specific questions or concerns”.
"The last couple of years have been horrendous," says Emmet Rennick, managing director, Financial Wellbeanz. "When you think about organisations over the last two years, they've had a serious body blow – going from the first experience of lockdowns and working remotely, and trying to get the balance right between managing employees' performance and giving flexibility." As a result, efforts towards financial wellbeing have often had to take a backseat.
Rennick believes that financial wellness remains slightly taboo in society and organisations, and that more will be required from employers as they look at how to reset their engagement models with their employees post-pandemic.
Stress
While there has been much talk about how people have managed to save during the pandemic, Rennick says that there are many cohorts of society who still struggle financially. “The number one stress in people’s lives are their personal finances,” he says. “Organisations are going to have to look at this. It’s a significant issue as regards to employee loyalty and mental health.”
According to a recent survey, a significant cohort of people is struggling with financial wellness, where “30 per cent of people could not cover an unexpected expense of €500 and 13 per cent would struggle with an unexpected expense of €100”. In addition, 30 per cent are struggling to make ends meet at the end of the month.
O’Dwyer says employers can help by “trying to understand where people are today in their lives and help them take the incremental steps” needed to get to a place of “security and confidence around their financial situation”.
Employers should understand different demographics and their needs, as some people may be focused on pensions and planning for the future, but others are struggling to manage day-to-day finances or need to get a mortgage.
Convey says, “From what I can see, financial wellness is now starting to grow and fit into employers’ existing strategy around employee wellbeing.
“Being financially savvy is an important life skill which people can underestimate or have never really had much guidance on. Therefore, I don’t believe it’s in an over-reach for employers to provide supports in this space. In fact, I see it as a great benefit and the right advice to people can make a meaningful difference to their pocket and their lives.”
Ultimately, O’Dwyer believes that providing proper financial wellness is about providing “peace of mind and the financial capacity to do those things that make life enjoyable in the short and longer term”.