As Australian businesses steer carefully through a post-covid, high inflation period, employee absenteeism is emerging as a prominent challenge. But what if the root of this problem lies not just in physical illness or mental health concerns but in an area less often acknowledged – financial stress?
Financial wellness is a critical facet of an employee’s overall wellbeing that directly influences productivity and engagement at work. As Australian businesses moved to a work-from-home employee model, identifying the impacts of financial stress became more challenging.
Countless studies show the correlation between financial stress and workplace productivity. The more stressed an employee is, the more distracted they will be. It is incumbent on Australian businesses to recognise this correlation and take a strategic approach to enhance their employees’ financial well-being.
Financial Stress: A Hidden Driver of Absenteeism
Financial stress, often overlooked in discussions around absenteeism, profoundly impacts employees’ work performance. An employee grappling with financial worries is likely less focused, productive, and more prone to taking time off work. In a work-from-home environment, early identification of employee productivity issues can be more difficult. Often a business will become cognisant of the size of the problem when it has metastasized to a serious issue, such as stress leave, prolonged absence and pronounced performance deterioration.
What’s more, the link between poor mental health and financial stress is well established. Anxiety caused by financial issues can lead to a range of mental health problems, significantly contributing to short-term and long-term absenteeism.
Investing in Financial Wellness: A Win-Win
Recognising these challenges, it becomes clear that businesses need to invest in financial wellness programs. These initiatives can empower employees to get control over their finances, reducing stress and promoting overall well-being.
A financial wellness program should provide employees with the knowledge, tools and guidance to manage their finances effectively. The components can vary, including lessons on budgeting, debt management, and financial planning for life events and retirement.
Financial literacy education is designed to give knowledge so that an individual can feel in control of their financial journey. Depending on the demographic or life stage of the individual, the educational areas of relevance will change. For example, some topics may include:
- Promoting healthy budgeting habits: Offering workshops or seminars on practical budgeting can substantially enhance employees' financial well-being.
- Financial resilience during redundancy: Job losses can trigger immense financial stress. Providing resources to help employees plan effectively under such circumstances can be invaluable.
- Financing retirement: Ensuring your employees have access to impartial financial education and advice can equip them to make informed decisions about their future.
- Debt management: Financial literacy can enable employees to manage their debts and understand their options if they face financial difficulties.
Implementing a Tailored Strategy
Here are some steps to consider while implementing a financial well-being strategy:
- Understand your workforce: The first step to an effective strategy is understanding your employees' needs and challenges.There is no one size fits all. The type of workforce, the demographic involved and the life stage will all impact the type of education sought by employees.
- Engage employees: Involve your employees in the strategy development process. Their active participation can lead to better buy-in and a more effective program.
- Management buy-in: Ensure the management team supports and understands the program's benefits. Their endorsement is critical to its success.
- Integration: Make the financial wellness program integral to your overall well-being strategy. When employees see the connections between different aspects of their well-being, the program's impact can be magnified.
There’s no question that employee well-being significantly impacts any organisation’s success, particularly when it comes to absenteeism. While physical and mental health has often been the primary focus, the importance of financial well-being is increasingly coming to the fore.
By taking a holistic approach to employee wellbeing, Australian businesses can navigate the challenges of the modern workplace, minimise absenteeism, and ultimately boost productivity and success. In the end, a financially well workforce isn’t just an investment in your employees—it’s an investment in your business’s future.