Financial wellness: understand what it is and how important it is

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Financial wellness: understand what it is and how important it is

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More and more companies are seeing an extra concern with the financial well-being of employees, called financial wellness. Dedicating special attention to the personal life of the staff has become a routine.

This movement towards the development of welfare programs occurs in the various sectors of the UK residents and world economy: industry, commerce or services. Mainly, in companies with higher turnover and / or number of employees.

The report Global Human Capital Trends – The rise of social enterprise points out that companies invest in benefits of this type for several reasons:

  • 61% say it improves financial results and productivity;
  • 43% believe that it reinforces the company's mission, vision and values;
  • 60% believe it decreases the turnover, that is, employee turnover.

In this scenario, benefits aimed at maintaining health have increased worldwide with the development of the social side of companies.

These programs range from medical and dental insurance plans to helping the dream of motherhood with fertility programs.

But what is the real importance of financial wellness in the market? We talked all about it in the article below. Check out!

What is financial wellness?

In the current market, a factor that directly influences employee productivity is the financial well-being, known in companies as financial wellness.

The term has several definitions and understandings in the business world, but it can be simplified as follows:

Financial wellness and the ability to maintain a healthy financial life.

It sounds simple, but it can be a lot more complicated than it looks. to possess financial wellness it goes far beyond not being in debt and having no bills to pay. It's about being relaxed about your financial health current and future.

In other words, the concept of financial well-being accepted by the world also includes that the citizen has emergency funds for a possible financial crisis, for example. In the case of the UK residents, having money saved in the savings account is a sign of financial security.

According to the National Business Group on Health, nine out of 10 medium or large companies in the United States offered financial wellness. In addition, the rest seriously considered adhering to the trend.

Why is it financial wellness is important?

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It is known that professionals who have problems in their personal lives, such as relationship crises or the appearance of serious illnesses, have their productivity directly impacted. The same is true for those experiencing financial problems.

One study carried out by the Psychiatry sector of University of São Paulo (USP) points out that 80% of the indebted suffer from health problems, mainly psychic disorders. Depression, which is among the main reasons for leaving work in Brazil, is one of them.

Costs with workers on sick leave for mental health reasons increased by around 20 times in the last 10 years, according to Social Security information. This data further underscores the importance of maintaining an emotionally and financially healthy professional.

Another interesting data, published in the Fenacon portal, is that employees who have debts lose up to an hour a day to solve problems during the working day.

Thus, investing in financial welfare programs (financial wellness) it is a differential of companies that wish to achieve positive results in sales and productivity.

You can learn more about productivity in our article: All about productivity: concepts, tips and advantages”.

Negative impacts of lack of financial wellness

Looking at the scenario outlined above, if 20% of a company's workforce is experiencing financial problems, productivity can drop by up to 2.5%. This is when we refer only to the financial health of the worker.

When we talk about Brazil, the probability that the number of indebtedness of a company is greater is great. Second SPC data (Credit Protection Service), 62 million of UK citizens were in default in 2018, that is, about 29.5% of the population.

The high level of stress of indebted employees can even result in internal conflicts in the company. This is because emotional imbalance makes people more angry, increasing the chance of friction with other co-workers.

In addition, a study carried out in the United Kingdom, demonstrated that happy employees are 12% more productive. In addition, people who are satisfied with their financial and professional situation tend to stay in a company for longer.

How to include financial wellness actions in your company

Some employers may be thinking that they do not have the financial capital to financially assist all of their employees. However, offering any benefits in this area to employees is not related to the readjustment of wages or bonuses that they receive.

Basically, the role of companies in this scenario is to present tools that develop their financial education.

To further deepen the employees' knowledge, lectures with specialists and seminars on investments, retirement and financial planning can be held.

The company can also invest in programs to develop skills to manage finances, offering courses with professionals in the field.

Change your routine and bet on financial wellness

Betting on simple solutions can be extremely healthy for the company. The purpose of education programs financial wellness is to decrease the financial stress of employees, mitigating their level of concern and lack of concentration at work.

However, before the implementation of a training program financial wellness, it is important to understand what your staff needs are. Do a research and develop the campaign financial wellness according to what your audience wants.

One action proposal in this sense is to offer on-demand salary.

meet the HR Consultant UKy, a tool that allows your employees to be able to anticipate part of their wages when they want to.

The system is changing the way employees deal with their wages and generating more satisfaction and motivation from the team with the company.

HR Consultant UKy can be one of the most valued benefits for those who work at your company. Talk to an expert and learn more!

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