How to improve employee financial wellbeing (tips and resources)

Why employee financial wellbeing is worth caring about

It’s no surprise that feeling financially insecure can lead to a lack of motivation, concentration  and productivity at work. When people are experiencing serious financial difficulties, it can feel similar to being under physical threat. The brain reacts accordingly, triggering the ‘fight or flight’ response and making it difficult to think about anything else. Focusing fully on work tasks can be nearly impossible when a person is in this state. In fact, one in five UK employees say they spend at least six hours each week thinking about or dealing with personal financial issues while at work. 

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Experiencing financial difficulties can make people more likely to experience mental health issues like anxiety, depression and burnout in the first place, and can reduce recovery rates or exacerbate symptoms for those already experiencing them, according to studies by the Money and Mental Health Policy Institute.

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Making sure you’re doing everything you can to give your staff a strong sense of financial wellbeing — as well as making sure you have an overall employee wellbeing strategy in place — is likely to pay back huge dividends, in terms of the levels of trust, concentration and dedication that those employees are likely to show.

Spill therapists’ tips for improving financial wellbeing in the workplace

There are plenty of practical things your workplace can do to support the financial wellbeing of your team – more on those later – but equipping managers to have open conversations with their team about personal finances is a great first step. 

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We asked some of our Spill therapists to share some starting points to help you and your team better understand the psychological aspects of personal finances. Because the better we understand that psychological relationship, the more likely we are to feel control over our finances — one of the defining parts of financial wellbeing.  Here’s what our therapists had to say:

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1. Think about where you learned your habits

We learn a lot of our behaviour from our childhood role models. So take a moment to ask yourself how people in your formative years dealt with their finances. What do you think you might have unconsciously learned from them?

• Do you tend to cut corners on daily purchases and then splash out on something showy?
• Do you feel shame around talking openly about money and finances?
• Do you see holidays as a time to let loose financially?
• Do you feel the need to constantly be 'careful' with your money?

Understanding who your role models were will help you spot which financial habits you picked up automatically from mum and dad, and which ones you'd like to consciously nurture going forward.

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2. Know your values

What we choose to spend our money on says a lot about who we are. Whether it’s organic kombucha or the supermarket’s own brand of shampoo, our day-to-day spending can offer clues into our unconscious values.

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For example, we might say we value the gym, but then spend more money each month on Netflix. Being aware of the difference between what we say and what we do can help us feel more in harmony and become more conscious of our spending. Greater self-knowledge helps reduce the effects of cognitive dissonance, which is that uneasy feeling we get when we do things that aren't consistent with what we really think.

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The bottom line is there's nothing wrong with Netflix. And owning our values explicitly helps us not to feel guilty when that subscription money leaves our account every month.

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3. Spot your cues

Over 90% of what we do each day, we do without thinking. By understanding what our spending cues are – whether that’s walking past our favourite cafe or browsing Etsy on our commute – we can catch ourselves before the cue triggers the behaviour. A small change, like taking a route to work that avoids that particular cafe, might just save us hundreds of pounds a year.

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Impulsive spending can also have an emotional cue. When we feel stressed, or frustrated, or sad, it's hard for us to just sit with the feeling and let it pass. Instead, we look for outlets, like shopping. Next time this happens, try and think about what reward you’re getting from your impulse buy. Does spending this way feel like you’re letting off steam? Or does it feel more like an achievement? Try experimenting with other activities that offer a similar emotional reward: boxing a punch bag, baking a cake, writing a haiku. See what works. Recognising your cues can help you to replace them with new habits which you’ll internalise over time.

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4. Understand what money can offer you (and what it can't)

We live in a society that promotes a scarcity mindset. We might automatically think, “I don’t have enough,” without stopping for long enough to work out whether that’s actually true.

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We often think that our next big purchase will make our lives infinitely better. But that's not the case according to science. A 2010 study by Nobel prize winner Daniel Kahneman and Angus Deaton of Princeton University shows that the relationship between money and happiness isn't linear: it's logarithmic.

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That means that more money does bring more happiness, but only up to a certain point. Once your day-to-day needs are met and you're not actively worrying about your financial security, the amount of happiness gained by each additional pound earned diminishes drastically and begins to approach zero. Once you've reached a certain level of income, your happiness will be better served by non-monetary pursuits: more meaningful work, for instance, or taking up fishing.

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5. Know your rights

Did you know that you can ask to be excluded from having an overdraft if you have a gambling addiction or struggle with any kind of mental health problem such as bipolar disorder or ADHD which could affect your finances? By law, financial institutions in the UK have a duty of care. That means there are policies in place that can protect you. So ask your bank to help you make use of them.

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6. Do what you do best

When we think we're bad at something, we tend to do it less. And financial planning is a skill like any other. In order to get better at it, you need to practice. 

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You could try managing your finances by pairing it with something you know you're good at. If you're an extrovert, then make it a social thing, and involve your friends in your savings goals. Or if you love crafting, then make a scrapbook to keep track of your spending. The more glitter, the better. 

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7. Focus on what you can control

Our minds often focus on things outside of our direct control. Dwelling on the economy, global news or stocks and shares just fans the flames of feeling powerless, which fuels symptoms of anxiety.

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If we bring our attention down to the micro level, it's possible to see there's a lot we can control in terms of our cash. What we do when we see our friends, how many nights a week we eat out or even how often we look at our banking app. 

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The closer you look, the more you see the things we have decision-making power over. And the more we focus closely on these small things we can control, the better we can defend ourselves against those things we can't control. Good habits compound over time.

Financial wellbeing resources and benefits for employees

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As well as understanding our psychological relationship with money, there are practical tools and resources that can also be incredibly helpful when it comes to financial wellbeing at work. Providing some of these resources to your team can be a great help. (And it goes without saying that, before you think about financial wellbeing resources and benefits for your team, the best place to start is by making sure you’re paying everyone fairly. Regular benchmarking against industry salaries and making sure you’re keeping up with inflation are two things to focus on.)

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• Provide life insurance as part of your benefits package, to give employees extra peace of mind when it comes to dependents. Try YuLife.
• Offer employee health insurance to give your team a safety net for their health (and income). It's another popular addition to the benefits package, but shop around: there's more than Bupa out there.
• Make sure you have a fair parental leave policy in place, so that new parents can worry more about their newborns and less about making ends meet. There’s some interesting detail on how CharlieHR came up with their parental leave policy here.
• Give flexible access to pay, for example weekly instead of monthly, can be useful in some sectors and for some employees where cashflow can be tricky. Wagestream and SalaryFinance are two options in this space.
• Offer generous pension contribution matching and empower employees with information about how pensions work. Pointing them towards a service like PensionBee, which combines pension pots from previous jobs and provides resources on saving, might help.
• Don’t ask employees to pay for expenses out of pocket, especially if they can sometimes add up. Providing an option with company cards, like Pleo, can make this less of a worry for some people.
• ‍Make sure employees have access to support if they are experiencing financial difficulties or a period of poor mental health. Giving them access to financial coaches through a service like Bippit or providing proper mental health support through Spill can mean that employees feel safe in the knowledge that help is there whenever they need it — and can be used preventatively as well, meaning that issues can often be addressed before they become work- and life-affecting.