Friday, October 6, 2023
Cost of Living Crisis - What Can Employers Do
As many employees began to struggle keeping their heads above water with the skyrocketing inflation that have cause a rise in the cost of living, how can you as an employer help your employees?
Many experts have concluded that financial wellbeing can be the catalyst of an individual’s mental health decline if it is taken care of. Some help from the employer during the current economic recession can prevent your employees from facing financial stress due to inflated cost of living.
Providing some training and integrating financial employee benefits into your policy helps to reduce the stress of fiscal crisis. This can help to further encourage the retention of your employees and an increase unproductivity level.
Financial wellbeing or also known as financial health can be defined as a sense of security that one has to fulfil their financial obligations. These individuals are able to control their finances and have money left over after spending on their necessities. Therefore, they can enjoy a peace of mind without having to worry about money.
Financial wellbeing does not only speak on the current financial state of an individual. It is also on the matter of the future where one can retire comfortably. Referring to the survey by Deloitte, 26% of Gen Zs and 31% of Millennials are not confident that they are able to retire with the comfort of stable financial.
According to Deloitte Global 2022 Gen Z and Millennial Survey, 29% of Gen Zs and 47% of Millennials are concerned about the current cost of living. Due to the high inflation, the rise in cost of living has caused Gen Zs (46%) and Millennials (47%) to live pay check to pay check and further contribute to their worry in the ability to cover their expenses.
Why Is This Important For Employers?
Without a well-maintained financial health, one can suffer through great financial stress that leaves many unwilling negative aspects in their life. As employer, the backbone of your company are your employees, it is pivotal to have healthy and stable employees for business to continue smoothly. However, with the presence of financial stress, your employees might be distracted and are unable to execute their tasks in a perfect manner. This will further contribute to greater aspects of negativity such as productivity and mental health decline as well as high turnover rate.
Hence, when your valuable assets are not able to execute their best performance, this could lead to a less effective service by your company which would further affect your company’s bottom line. Therefore, it is important that you take it to the root by ensuring that your employees’ financial wellbeing is well taken care of.
Let us look at the impacts of financial wellbeing to your employees and organisation.
Decrease In Productivity
Not every employee has the talent of “leave it at the door”. Some may resort to bringing it to work and have it distracted them through the office hours. Their financial worries have unknowingly affected their focus and impact their productivity where they spend more working hours concerning their personal finances issue.
Mental Health Declining
Like any other forms of stress, financial stress can lead to a declining mental health. As overthinking occurs, some employees may develop anxiety and depression. According to the PwC Survey more than 57% of employees agree that finances are among the top causes of their stress. With the inflation growing over their wages, these workers find themselves unable to rest well which further deteriorates their mental wellbeing.
With that, it is possible that your employees might struggle to delegate their work without relapsing or having a burnout phase due to this fiscal crisis. Employees who show up to work with financial issue and mental stress under their belt may cause difficulty in performing their work at the very the best.
Trouble Retaining Employees
Based on a study by Morgan Stanley, as your employees’ financial stress gradually increases, these employees are nine times more likely to develop troubled relationships with their colleagues. This resulted in them searching for a new job. Hence, it will be harder to maintain a low retention in your company due to this never-ending financial stress of your employees.
These employees with financial stress might find themselves feeling significantly dissatisfied with their pay driving them to quit their position. These employees will go on a search to find better opportunities that could give them the financial satisfaction. In their survey, Deloitte found that 40% of Gen Zs would or planning to leave their job within 2 years due to prominent levels of dissatisfaction when it comes to their pay. This shows that there is a decrease in loyalty by 12% in comparison with data from the year 2021.
How Can Employers Help Improve Employees' Financial Wellbeing?
As an employer, prioritising financial wellbeing into overall wellbeing policies of your employees can help to lift and ease the financial burden of the community of your organisation.
Here are a few ways you can help:
Financial Wellness Training
Discussing their financial burden should not be a taboo topic to discuss. Instead, inviting them for a conversation about their financial struggles can help you to curate the best financial wellness training for the team. Such training includes money managing seminars, financial education, financial planning talk and more.
Incorporating Earned Wage Access
Earned Wage Access or EWA offers ease in cashflow for employees by allowing them to access a portion of their earned wages before payday. Instead of waiting for payday, you can help your employees to ease their worries and burdens by providing instant access to their hard-earned money through EWA. EWA also serves as a safety net for your employees preventing them from high-interest loans and debt.
EWA can be lifesaving for those who are faced with emergencies with no extra funds to cover them. This could be hospital visits, motor repairs, and even environmental factors like flooding. The employees might find themselves hopeless and turn to high interest lenders, or even family and friends for help but with EWA, they actually have an additional option. Being able to access and withdraw their hard-earned wages is crucial for those who don’t have extra in times of emergencies.
It has been reported that Paywatch has reduced over 66% of users' financial stress. Together with Paywatch you can help improve your employees’ financial wellbeing and reduce the turnover rates at your company. Invest in the financial health of your employees for the maximised productivity and effectiveness of your organisation.
Employees are your most important customers. Understanding their struggles and helping them cope are one of the many ways you can handle your valuable assets with care. Providing financial wellness training and incorporating Paywatch can help you to maintain a effective group of employees thus further improving their mental wellbeing as well as productivity as team.