Money Matters — Investing in Employees’ Financial Wellbeing By Benjamin Elms, Regional Director, Randstad Hong Kong

As the saying goes, “money makes the world go round”, but concerns about money can be a major source of stress. For most people, money equals having a sense of financial security. A stable income helps to pay for essential needs, such as food, education, and housing. Financial stress is the outcome of persistent worrying and anxiety about meeting financial goals. Being financially secure does not necessarily mean being wealthy, the same as being in good physical shape is not equivalent to being able to run marathons – it means that people can lead a more comfortable and less stressful life.

The persistent worry about COVID-19 and its health and economic consequences has heightened awareness of financial stress, especially issues arising from pay cuts and job losses and the associated risks of not having a financial plan. Since the Randstad Hong Kong Employer Brand Research was launched in 2013, “attractive salary and benefits” have ranked as the top most important employee value proposition (EVP) respondents seek in an ideal employer. While salary is important in achieving financial wellness, it is not the only component. Another factor that consistently ranks high on a list of 16 EVP measurements is “being financially healthy”.

Why employee financial wellbeing matters

Tackling poor financial wellness is not simply a question of remuneration – research shows that financial worries can affect employees regardless of their level of salary income. If individuals face financial woes and feel stressed they risk developing a range of health problems including emotional exhaustion, fatigue, and stress. It should come as no surprise that staff who are worried about their finances tend to bring that stress to work. Research clearly links financial wellbeing to both employee wellbeing and work performance. Financial stress can distract staff from their work and cloud their judgment, resulting in them not performing at their productive best.

Producing work that is below expectations can further escalate the problem, especially if people face the possibility of losing their job. Financially stressed staff are also more likely candidates for absenteeism. According to the Society for Human Resource Management, employees who worry about financial issues miss almost twice as many work days per year compared to their unstressed colleagues. This can also have an impact on the wider workforce who could find themselves with a heavier workload due to the increased absence of colleagues. Financial stress is also shown to increase presenteeism – employees being present at work despite being physically or mentally distracted from performing to their usual standards.

Financial wellbeing programmes can benefit employers and employees

Although financial wellbeing is increasingly recognised as an integral element in the spectrum of physical and mental wellbeing, identifying staff who are struggling in this respect is not always simple. The reality is that financial wellness varies across all pay scales. Employee surveys back this up. A BlackRock People & Money report conducted in 2020 showed that 63% of the respondents found it difficult to balance paying bills with saving and investing for retirement. Another survey conducted by the Hong Kong Deposit Protection Board in 2021, found the average monthly savings of respondents had dropped by 6% to HK$6,600, the lowest amount in four years. The issue is not simply about the current situation – it is about living well, saving for the future, having enough money for emergencies, and avoiding getting into debt.

Research shows that supporting and improving workers’ financial wellness not only benefits workers themselves, but also business outcomes such as productivity, innovation, customer satisfaction, and employee turnover and engagement. When staff have access to financial wellbeing programmes, they are more likely to feel valued and supported, which gives them reasons to continue working for the organisation. Employees are also more likely to develop a big-picture mindset and better understand how their work makes a contribution to the purpose and impact of the company.

Financial wellbeing programmes can benefit employers and employees

A strategy to increasing financial wellness cannot be forced on staff. Workforces’ financial circumstances and needs vary, they possess different levels of knowledge, awareness, and financial wellbeing. Building financial wellness in the workplace is about identifying what staff want, as well as pinpointing which goals and tools will empower them. Good communication with employees is essential. Encouraging a workplace culture where employees feel comfortable talking to both HR practitioners and the management team is important. For instance, the HR function could lead dialogue with staff and line managers about the financial challenges and opportunities confronted by them and the organisation. This type of conversation demonstrates both concern and awareness, and can help dismantle the barriers often associated with talking about financial issues.

Led by the HR function in collaboration with the management team, surveying employees can provide useful insights on how to prioritise different elements of financial wellbeing programmes. Conducting surveys to collect data and insights should be carried out regularly so that staff can give feedback on the usefulness of financial wellbeing initiatives. However, it is important to keep in mind that providing financial information is a sensitive issue. Therefore, make it clear that surveys are anonymous and responses are private.

Raising the bar on financial literacy

To broaden the scope of financial wellness advice, companies could consider inviting experts from banks, insurance firms, MPF scheme providers, and fintech companies to conduct in-person presentations or webinars for their workforce. This could include group learning or one-to-one financial coaching where employees can learn about the options applicable to them. Consider inviting regular guest speakers to run a workshop in the office or virtually on topics such as budgeting, saving tactics, investing, and paying off or managing debt.

If finance wellness programmes are a new concept, ponder ways to introduce easy to understand ideas and simple tools before introducing a full-scale suite of more complex initiatives. For example, there are loyalty and rewards schemes employers can register with to allow employees to receive discounts on goods and services when they shop online through the scheme. With the number of staff working remotely or in a hybrid model increasing, it is important to ensure financial wellbeing initiatives are structured to encompass all employees, regardless of where, when, or how they work. Conversations with new hires on the wealth and health benefits the organisation offers, such as healthcare, retirement, and bonuses, can help them understand the total compensation package and also highlight how the company cares about their financial wellness.

Nowadays, webinars and podcasts covering a wide range of financial wellness topics are just one click away. These often suit the preferences of millennial and generation Z employees. Online tools can be helpful for companies that lack the resources to help their staff with comprehensive financial wellness support. The HR function, through internal communication channels, can signpost these resources so that employees can log on to them at their own convenience. Line managers can also be encouraged to direct their team members to online resources.

For organisations looking for a war on talent differentiator, offering financial wellbeing programmes strategically aligned to the needs of workforces is the way to win.