Financial Wellbeing now needs to be part of any workplace wellbeing strategy

Nick Lawlor, CEO, Employee Financial Wellness.

In today's world, financial wellbeing and financial literacy are intrinsically linked. When people are financially literate, they are enabled to make effective decisions about their finances, leading to reduced stress, and improved mental wellbeing. This skill plays a key role in the workplace, where financial stress can affect employee productivity. In our latest round of independent research amongst HR and wellbeing leaders ‘9 in 10 surveyed said that they were concerned about the impact of financial stress on their employee productivity’.

Financial Literacy Around the World

Latest research shows that financial literacy levels are low worldwide, according to the Organisation for Economic Co-operation and Development (OECD), only 26% of adults across OECD countries understand basic financial concepts such as inflation and interest rates. This lack of basic financial knowledge can lead to poor financial decisions, inadequate savings and poor retirement planning.

Financial Literacy in Ireland

Ireland too faces challenges in financial literacy as according to the latest OECD figures, approximately 55% of adults in Ireland understand basic financial concepts. This shows us that a significant portion of the population lack the necessary skills to understand finances effectively. The Irish government has recognised this gap and are working on rolling out a National Financial Literacy Strategy.

The importance of financial literacy in Ireland cannot be overstated. Irish workers are exposed to a wide range of financial products and services and the ability to understand and manage these products is essential for financial wellbeing in the short and long term.

Financial Wellbeing and Mental Wellbeing

There is a clear link between financial wellbeing and mental wellbeing. Financial stress can lead to anxiety, depression, and other mental health issues. Research has shown that money and financial issues are the leading cause of stress for many people. This stress can affect home life and work life such as employee performance and overall health.

Stressed employees are more likely to be distracted and more prone to absenteeism. Employers who understand the importance of financial wellbeing can put preventative measures in place to prevent it, leading to a healthier, and more productive workplace. Our research shows that 41% of HR and wellbeing leaders in Ireland list employee financial wellbeing as one of their biggest challenges in the next 12 months.

Financial Education Programmes: A Solution for the Workplace

One effective solution to improve financial literacy and wellbeing is the implementation of financial education programmes in the workplace. According to our research over a third of employee requests for support asked for financial support or guidance. These programmes can provide employees with the knowledge and tools they need to manage their finances effectively.

Financial education programmes can cover a range of topics, including budgeting, saving, investing and retirement planning. By offering the right programme, employers can help prevent the stress of their employees before it occurs.

The right financial education programmes benefit both the employer and the employee. Employees who are financially well have less stress and improved mental health. For employers it can mean lower absenteeism and a more engaged, loyal workforce.

Conclusion

By addressing financial literacy and wellbeing for employees, employers can create and maintain a healthier, and more resilient workforce. In the context of Ireland workplace financial education programmes can make a significant difference. These programmes not only enhance financial knowledge but also contribute to the mental and emotional wellbeing of employees, creating a workplace where employees want to stay.

To request a copy of Employee Financial Wellness and HR leader research simply click the link.