Money-related stress is driving absence, side hustles and despair, but smarter, more personalised financial wellbeing benefits could help turn the tide, writes Claire Churchard
For many employees today, financial stress is not just a background worry, it’s a daily reality that affects performance, wellbeing, and even attendance.
More than half of Gen Z and millennial workers are considering taking on a second job to manage the cost of living, according to recent research from provider Boostworks. Perhaps unsurprisingly, financial pressures are the main reason people of all generations take on a side hustle.
Food, fuel, and housing costs remain high, while financial security feels increasingly fragile. But something else that is changing is how employers are starting to respond, with more personalised, inclusive, and tech-enabled benefits to support employee financial wellbeing.
“From the responses of the people using Finwell, we know that 70 percent are concerned about their finances, enough that it affects the productivity of more than a quarter of them,” says reward and employee benefits specialist Jane Vivier, who works for financial wellbeing provider Finwell. “A third are even missing work in an attempt to sort things out. This clearly has a huge impact on employers and the economy.”
The human cost
A survey by Wealth at Work found that 40 percent of employees are concerned about not having enough savings for unexpected costs, while 38 percent worry they’re not saving enough for the future. These concerns spill into the workplace, with 38 percent of employees saying financial pressures lead to stress, mental exhaustion (33 percent) and decreased motivation (26 percent).
People with money concerns are also three times more likely to consider suicide.
But employers can make a positive difference, says Jonathan Watts-Lay, director at Wealth at Work.
“Employees are likely to have different financial priorities depending on their life stage. For some the priority may be saving a deposit for a first home, whilst for others it might be saving for retirement, or for some it may be paying off debt,” says Watts-Lay.
He says that the key to financial wellbeing is being able to make informed choices about your finances.
“Offering a range of financial wellbeing benefits which are aligned in strategy should help employees feel financially secure,” he adds.
Personalisation as a priority
Today’s workforces are diverse in life stage, financial literacy, culture, and digital confidence. So, tailored education and support can prove more effective than a blanket approach.
Wagestream’s chief impact officer Emily Trant highlights how structural inequalities shape financial stress: “Women, younger people, and ethnic minorities are all more likely to be in lower paid and insecure work with fluctuating hours and pay.”
She says: “An employee who works irregular hours and is paid every four weeks has a totally different set of challenges from a salaried employee who gets paid on the same day each month.”
Financial education can help ease the cognitive burden of navigating your choices, but Trant adds that on its own it is unlikely to put a dent in financial wellbeing concerns if the core challenge is more substantial.
Vivier advocates for more personalisation, saying: “As employers we only see the work side of a household’s finances. We know nothing of the background. By allowing people to assess what they need, we can be more targeted and make sure we reach the right people with the right information.”
Workplace delivery
Personalisation by self selection or self guided plans means that people can choose what’s relevant, in an environment that’s comfortable, says Vivier. Finwell is an example of this as it works by training financial wellbeing champions for the workplace.
Finwell also offers its ‘PAWA plan’, which takes employees through four stages to help them choose financial education based on their needs and attitudes. The stages are: Personal Money Score, Areas of focus, What are the next steps, and Action taking.
As well as self-guided plans, personalised money coaching is another employee benefits option. Earlier this year, two providers teamed-up to make this type of support available to more employees. Financial coaching service Octopus Money and benefits platform provider Benifex are now partners offering money coaching via the platform.
Separately, employer BNP Paribas also rolled out Octopus Money’s financial coaching to its 8,000 UK staff.
“Once an employee registers their interest, they’re matched with a dedicated, expert money coach,” says Thomas Hiles, UK head of benefits at BNP Paribas. “This first conversation is about understanding their financial position and what they’d like to achieve.”
Following that, employees receive a personalised financial plan, which they can access online through the provider’s portal.
Technology and innovation
Tech is expanding the access to and scale of this type of benefit. From mobile-first delivery to AI-driven insights, it enables more inclusive solutions. But digital confidence varies.
Wealth at Work’s Money&Me platform uses gamified, interactive learning to improve financial literacy. It aims to build better financial habits by offering practical, accessible content, while guiding employees towards the right next steps to take control of their money.
At the Post Office, digital tools help reach all employees, even frontline workers, through a benefits app. But not all employees are comfortable using tech.
“Whilst technology can offer great advantages, the digital divide is a prominent challenge with an aging workforce. Not all may have access to a smartphone or be confident with digital tools,” says Alexandra Rookes, benefits and pensions manager, at the Post Office. “It’s important to support those who aren’t as confident.”
Vivier says: “Tech is great for starting the journey, but people need to talk about money more. Having champions in the workplace means that employees have someone trusted to approach.”
Recognition as wellbeing
Recognition-based rewards are another way to enhance financial wellbeing, says Lynette Silva Heelan, international consulting practice leader at Workhuman.
They are an opportunity to give meaningful appreciation along with treat or experience. “This promotes financial wellbeing beyond training and advice,” she says.
But Silva Heelan adds that while many companies offer basic financial wellness benefits like training and pension advice, there is a need to go further.
“Companies should provide additional benefits that help employees manage their finances in a more meaningful way. This could include personalised financial planning, emergency savings options, or alternative approaches, such as blending mental and financial wellbeing by implementing a robust employee recognition programme that gives employees the acknowledgement they need for meaningful work done well, plus extra disposable income through rewards earned by receiving recognition from managers and colleagues.”
However, a recent snap poll of employers, taken during the Benefits Expert Benefits Unboxed Live Webinar earlier this month, revealed that although the appetite for financial education and guidance is there, employers have more to do.
Poll results showed that just 12 percent of webinar respondents thought financial wellbeing was a top priority and essential for employee engagement, while 32 percent agree it is important, and say they are exploring the options as they evolve.
But nearly half (47 percent) said that while they agreed that financial wellbeing benefits for staff were useful, adding it to their suite of employee benefits was “not a current focus for our organisation due to budget constraints”.
ROI matters
So, how can HR teams show that these programmes actually work and secure the budget to provide them?
Wagestream says that ROI can be demonstrated in a number of ways.
“To evaluate employee outcomes, surveys and focus groups should be regularly conducted to determine the impact these schemes have on metrics like financial stress, job satisfaction and engagement at work,” says Trant.
To assess the impact on business performance, employers can track metrics like staff retention, shift uptake, and recruitment speed, alongside how widely financial wellbeing benefits are used and how engaged employees are with them, she adds.
Vivier says: “Ninety-eight percent of our participants go away saying they have learnt something which is a great statistic – when it comes to finances ‘you don’t know what you don’t know’.”
As the high cost of living continues to bite and employee expectations evolve, financial wellbeing is becoming an ever more important part of the employee benefits package. Don’t get left behind.
