GTP20: Can financial wellbeing help you live a happier life?

Close Brothers Asset Management

This blog post has been produced for the Greater Birmingham Chambers of Commerce as part of the 2020 Growth Through People campaign.

Growth Through People is the Chamber’s annual campaign aiming to help local firms boost productivity and grow through improved leadership and people management skills. In 2020 this involves 8 free workshops taking place between 2nd March and 27th March, culminating in a full-day Growth Through People conference on 2nd April. In addition, throughout the campaign the Chambers will be publishing thought leadership podcasts, videos and blog content such as this.

Thanks to our Headline Sponsors – Prime Accountants Group, Aston University, Curium Solutions and CIPD - all workshops are free to attend. Interested readers can find out more and register to attend Growth Through People workshops here, and the Growth Through People conference here.

Do we know what truly makes us happy? How can we become more aware of our own wellbeing, and what are the obstacles we need to overcome?

I believe that money can’t buy us happiness, but being in control of our future certainly helps.  As strange as it may seem, day to day life is not particularly conducive to wellbeing. We spend so much of our time comparing ourselves to others via social media; we tend to focus on the search for wealth rather than purpose, and we have the media constantly telling us we will not be fulfilled unless we’re spending money.

Being a human in today’s fast paced world can be tough, and knowing what truly makes us happy is a difficult thing to understand!

Combined with the pillars of social and physical, financial is undoubtedly one of the areas of life that contributes towards our wellbeing.  Any robust financial plan should therefore focus on how to use your money to build your wellbeing and reach your future goals and motivations.  Once we’re clear on what we want to get out of life, we can plot a path towards meeting our objectives.

Providing financial wellbeing in the workplace is a great way to help people connect with their finances alongside their individual circumstances and future goals.  Encouraging employees to open up and talk about financial wellbeing is a great way to attract and retain the best staff, and means they’re making the very best of the staff benefits available to them.

What is financial wellbeing anyway?

A lot is said of emotional wellbeing, but financial wellbeing is just as crucial and is a topic that should be more openly discussed.

In its simplest form, financial wellbeing is a sense of security, comfort and confidence that you have enough money at your disposal to stay afloat and meet your individual needs. Good financial wellbeing means you feel you are in control of your finances while having the financial freedom to enjoy life. Poor financial wellbeing can have a direct impact on your private relationships, your workplace relationships and your mental state.

Poor financial wellbeing can arise as a result of:

  • Unmanageable debt
  • Uncertainty that you can cover basic expenses
  • Insufficient or unstable income
  • No budget or financial planning
  • A lack of savings

Why bother talking about financial wellbeing at work?

Money worries aren’t just an individual employee concern — they have a direct bearing on company performance and productivity. It’s been shown that when an employee is preoccupied with financial concerns, their productivity declines. According to the Chartered Institute of Personnel Development, one in four employees claim financial difficulties are impacting their ability to do their job, with one in ten saying they find it hard to concentrate and make decisions at work because of money worries.

Issues with financial wellbeing can also cause a deterioration in mental health, leading to increases in anxiety, illness and absenteeism. 

When employees are suffering financially, they begin to question their decisions in life — including their position at your company. They might begin to feel undervalued, stressed, distracted and hopeless. Feelings like this can leave employees feeling unmotivated and disengaged — which will more than likely prompt them to shop around for competitors who can provide a more enticing rewards package.

When you really drill into it, financial issues are a major distraction — and one that businesses can take steps to combat. Here’s some steps to encourage employees to address and open up about financial wellbeing at work.

Show employees you’re serious about their financial future

Financial wellbeing isn’t a tick box exercise; it’s not something you can discuss once, pay lip service to or ignore. If your organisation is serious about opening up a discussion regarding financial wellness, you need to start by showing your employees you take financial wellbeing seriously. This will require a significant organisational change — but it will pay dividends in the future.

Rather than simply asking employees about their financial concerns, take concrete steps to help all of your employees. Consider carrying out a financial health check to diagnose where the problems lie within your workforce, enabling you to implement a tailored financial education programme that truly tackles employee need.

By showing a duty of care, your employees will feel valued and make the very most of the benefits package available to them, which will encourage people to talk more openly about their financial future.

It’s not a one-stop solution

Every company is different — they have their own values, their own traditions and a unique culture. Similarly, each organisation is filled with individuals with distinct needs, concerns and challenges. When implementing a financial wellbeing strategy, this is something that needs to be kept in mind. There is no sense in introducing a one-stop solution. People learn in different ways and so a one-stop solution needs to recognise this, ensuring employees are heard and understood.

Remember that money worries evolve

Money worries change throughout life. When employees are younger, they might be stressed over getting on the housing ladder, or repaying their mortgage. Older employees might be concerned about having enough to get by in retirement, or caring for elderly parents. This is something employers should be sensitive about and aware of, ensuring any financial wellbeing programme recognises all of these employee segments and needs.

Power to the people

Your employees might be holding back from discussing financial wellbeing at work because they’re unsure how doing so would benefit them. With the right financial wellness plan, your employees will understand that by speaking up and asking for help, they’re empowering themselves with the tools they need to make the most of their financial future.

Overall happiness and self-esteem are influenced by our sense of financial control, not by how much we earn each year, and by giving people the tools and confidence, we’re helping them meet their future goals and aspirations.

Harry Bell
Chartered Wealth Manager and Financial Planner
Close Brothers Asset Management

Harry is a Chartered Wealth Manager and Financial Planner at Close Brothers Asset Management, helping empower people to live their ideal lifestyle by connecting their money to their lives.