The gift of financial wellness

Emily Watson of Gallagher on why financial literacy programs are a must for both your people and your business to thrive

The gift of financial wellness

This article was provided by Gallagher.

In business, our people are our greatest asset, and usually the biggest cost on the balance sheet. However, when we think about the risks we need to manage and mitigate, we sometimes don’t pay as much attention as we should to our people.

It’s easy to understand why – the risks aren’t as obvious. Of course, if a valuable team member suddenly decides to leave, it is certainly noticeable. However, the more common risks are frequent, and relatively undetectable, yet they’re eating away at your company’s performance.

One of the biggest challenges a company faces is productivity, which research shows is directly related to stress. The more stressors an employee has, the less work they’re doing for you.

A major contributor to stress – which people then bring to work – is finances, with 60%* of Australians saying it’s the leading cause of stress in their lives. And financial stress does not discriminate; it affects seven out of 10 people, from chief executive officers to office juniors.*

The impact this has on a business is huge because research shows that every person with financial stress spends two hours a week of work time on their personal finance issues, and takes an average 2.4 sick days more than their financially confident counterparts*.

By doing the maths, the extent of the problem becomes apparent. For a company with 200 employees, paying each of them the national minimum wage, the weekly cost is $7,000, or $325,000 per year - and that’s before the Christmas season has begun.

As the festive season kicks off, many businesses see this as a time for employees to recharge the batteries before the New Year. The reality is, for many Australian households, this is the most stressful time of year.

The Australian Retailers Association and Roy Morgan 2021 pre-Christmas retail sales predictions forecast that overall spending will come in at $58.8 bn, up 11.3% on pre-pandemic conditions.

The Salvation Army tells us one in three (32%) feel pressured to spend more than they can afford at Christmas, and over 12 million (65%) Australians said Christmas adds extra strain to their finances.

A financial literacy program for employees is something all business leaders must consider. The time when this sort of employee support was considered a ‘nice-to-have’ is well and truly over. Financial wellbeing is essential.

Sadly, 85% of Australians don’t have a financial plan of any sort, whether drawn up by a professional or one they’ve put together themselves. The vast majority of employees live week to week, month to month, with little planning for their financial future.

The organisations that put in place programs that make a genuine difference to the livelihood of their people will be the ones to survive ‘The Great Resignation.’

“We are seeing a huge demand in financial wellbeing programs,” says Emily Watson from Gallagher’s Benefits & HR Consulting division.

“Human resources and business leaders recognise that if you can help lift the financial burden for your team, you not only help with their overall mental wellbeing, but there’s a significant impact on your company’s culture, productivity and turnover,” she says.

Gallagher’s Better Wealth tool is leading the market with an online financial wellness platform that empowers employees and their families to create a personalised plan to manage their money better.

“When it comes to financial wellbeing, not all programs are built equally. Many are still just offering content about eating less avocado toast. For most of us, reading content doesn’t fix bad habits,” Watson warns.

“Gallagher was very aware of this when we created our program. Better Wealth is completely tailored to the individual, and looks at both current reality and future possibility, with a personalised action plan for their own financial journey. We want to make a real difference.”

With companies still recovering from the pandemic, discretionary spending on employees is still being heavily scrutinised, which is why investing in the right benefits is more crucial than ever. 

“Don’t just do what you’ve always done for your team and think that’s enough. Organisations that proactively invest in their people are the ones that make the shift from a good business to a great one,” Watson concludes.

For more about Gallagher’s Better Wealth, click here or to speak to someone at Gallagher about your overall people strategy, click here.

*Gallagher’s Financial Confidence Report 2019

Emily Watson has 12+ years’ experience in key industries: financial services (lending, investing and insurance) and government/not for profit. Watson describes herself as having “a strong passion for building a happier and healthier workforce by helping organisations connect with their people in meaningful and valuable ways.”.

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