How you can help your employees strengthen their financial well-being

When we talk about employee well-being, we often focus on mental and physical health. Both are of the utmost importance and employers are always looking for new ways to invest in employee well-being. Well, there is a third option that’s certainly worth the investment, and that’s financial well-being.

Key points

• 2023 research from NAB revealed one in three Australians view money as a significant cause of stress, while one in five had missed paying a bill during the three-month survey period
• Research from The Australian National University (ANU) also found a quarter of the population is struggling to meet the cost of living as everyday items become more expensive
• Low income, debt and financial uncertainty are common causes of poor mental and physical well-being, including panic attacks, depression and anxiety

What is financial well-being?

Financial well-being is about more than just the amount of money in someone’s bank account; it’s about how that money is saved and spent. Someone with high financial well-being is able to meet all their financial obligations, including bills and expenses, while also having enough money set aside for luxury items or emergencies.

Meanwhile, someone with low financial well-being would be struggling to meet their everyday expenses or they can only afford the necessities. There would be no money set aside for a rainy day or an unexpected event such as a car breakdown.

Why is there so much financial pressure?

No one has to look too hard to find the reason why there’s so much financial pressure on Australians, particularly low-to-middle-income earners: the cost of living has rapidly increased. 

Rents and mortgages have hit the roof, the average weekly shop now costs over $200 for a family of four, while energy expenses and household bills continue to rise. Throw in additional expenses such as existing debt, childcare, petrol, medical bills, school fees, etc, and it’s easy to see why there’s so much financial stress.

How can employers help?

If your staff are experiencing any financial stress it will impact their work in some way. Some employees may be unable to work due to the physical manifestations of stress and anxiety, while others could show discontent if they feel their wage does meet their expectations. You could find yourself losing valuable workers if they want higher wages and better financial benefits. 

But don’t worry, there’s no reason to stress. Plenty can be done by an employer before you reach that stage. It’s just important you are also reaching out to employees to let them know help is available, rather than just waiting for them to put a hand up for help once they’re chest-deep in the water. Here’s how you can help employees become more financially aware.

Provide education and support

Employers are not in a position to provide specific financial advice to employees, but you can educate and inform them with advice that’s general in nature. Examples of great resources that strengthen financial literacy include:

• Moneysmart; a Government-run website offering tools, tips and guidance for everyone
• Bank-affiliated educational tools such as the Davidson Institute (Westpac) or MoneyMinded (ANZ)
• Short courses such as Money Talks by The Smith Family or Wesley Mission’s Financial Literacy Education Program

You could also print and supply informational documents in the office or lunch room, or provide self-help and guidance books for staff to read.

Bring in a financial advisor

Although you’re not in a position to offer unique financial advice, you can facilitate employee support by contracting a licensed financial advisor. Consider bringing in an advisor once a month – or on a schedule that best suits staff demand – who can answer any questions while employees are on-site. This shows you have a vested interest in their financial well-being. 

Employees should also have the option of accessing financial counselling or support services through your Employee Assistance Program (EAP) provider.

Ensure wage growth is accurate

Financial well-being isn’t entirely down to wages, however, it does heavily depend on the amount of income in a household. And with the dramatic increase in the everyday cost of living expenses, it’s up to you to ensure wage growth is accurate. Evaluate wages annually to make sure they are reflective of current living expenses, particularly for wages that are not attached to an award or bargaining agreement.

Flexible ways to help your employees save money

• Support staff with kids by accommodating shift hour requests so they can avoid extra childcare/after-school care costs
• Set up a carpool system for workers who want to reduce travel expenses
• Consider working from home for office staff who don’t have to be on-site every day to reduce the amount they spend on transportation
• Offer additional incentives such as gym membership discounts or the Blue Light Card to give frontline workers additional savings

Provide alternative payment options

There are flexible pay options that allow staff to access a portion of their wages ahead of their typical pay cycle. One tool to help deliver flexible pay is Wagestream, an app that tracks wages, offers educational resources and is linked to external savings and discount options. This could benefit employees facing unplanned expenses such as a surprise medical bill, helping them save in the short-term without making long-term sacrifices.