In sectors like restaurants, retail, and hospitality, the notion of employee financial wellbeing is often undervalued. This oversight can significantly contribute to high employee turnover rates. Understanding and enhancing financial wellbeing is not just about the size of paychecks; it's about fostering a more engaged, satisfied, and stable workforce.
The Essence of Employee Financial Wellbeing
Financial wellbeing is a term we will hear a lot more of over the coming years. But what does it actually mean? In the workplace, it refers to how employees feel about their day-to-day relationship with money and the control they have over their financial future.
If an employee has healthy financial wellbeing, they feel secure and confident bout their finances. They have minimal worries about money and know how to address worries if they arise. Someone with poor financial wellbeing, on the other hand, is struggling financially or is stressed about money. Their concerns, for example, could relate to debt, rising expenses and lack of savings.
So, how does financial wellness translate to the workplace and what is the impact on business? Well, one study from the Centre for Economics and Business Research(CEBR), which looked into financial wellbeing and the implications for workplace productivity, revealed that 10% of full-time and part-time employees missed days at work and 18% of workers noticed a decline in productivity due to financial worries. CEBR predicted this to cost UK employers up to £6.2 billion per year – and these are pre-pandemic and cost-of-living crisis numbers.
As many as 24 million UK adults don’t feel confident managing their money, and according to the Office of National Statistics, this spring, around three in four adults (77%) reported feeling very or somewhat worried about the rising costs of living.
As a potential recession looms, addressing financial wellbeing and providing security for hourly paid employees has never been more important. Employers need to protect their employees from financial hardship – and this goes far beyond just paying a fair wage.
HR teams should be investing time and resources into building effective financial wellbeing programmes to ensure a content, productive workforce, which, as we all know, provides endless benefits to a business.
Employee financial wellbeing encompasses the ability of workers, especially those with irregular incomes like hourly, gig, and shift workers, to comfortably meet their financial needs. It's about more than just earning enough; it involves aspects like managing debts, saving for the future, and having access to financial resources and education. In industries characterized by variable incomes, this stability is crucial for employee satisfaction and retention.
Financial wellbeing also includes the psychological aspect of feeling financially secure and not being overwhelmed by financial stress. It's a comprehensive approach that looks at the financial health of an employee as a critical component of their overall wellbeing.
Why Financial Wellbeing Matters for Employees
Financial stress is a significant burden that can severely impact employees' mental health and work performance. For workers in high-turnover industries, constant worries about financial security can lead to disengagement and a lack of company loyalty.
Addressing financial wellbeing can thus improve employees' lives and increase their productivity and commitment to their jobs. It is essential for maintaining a healthy work-life balance, ensuring that employees are not constantly preoccupied with financial concerns.
Financial wellbeing is also tied to physical health, as financial stress can lead to health problems, which in turn affect an employee's ability to work effectively.
The Crucial Role of Employers
Employers in these sectors have a unique opportunity to positively impact employee financial wellbeing. Introducing initiatives like earned wage access and providing resources for financial planning and debt management can offer tangible support.
Such steps show a commitment to the holistic wellbeing of staff, fostering a more engaged and motivated workforce. Employers can create a more inclusive workplace by understanding and addressing the diverse financial needs of their employees.
By integrating financial wellbeing into the company culture and policies, employers can demonstrate their commitment to their employees' overall health and happiness.
Employee Net Promoter Score (eNPS) and its significance
Tools like the Employee Net Promoter Score (eNPS) and regular employee surveys are vital in measuring the effectiveness of financial wellbeing initiatives. These tools provide real-time feedback and insights into employee satisfaction and engagement levels, guiding employers in tailoring their strategies to meet the evolving needs of their workforce. The eNPS can also help identify specific areas where financial wellbeing efforts are lacking and need improvement.
It serves as a valuable metric for tracking changes over time and understanding the impact of different initiatives on employee morale and loyalty.
Innovative Practices for Enhanced Financial Wellbeing
Adopting practices like financial education workshops, employee feedback platforms for real-time communication, and flexible pay options like earned wage access can revolutionize employee experience.
These initiatives address immediate and long-term financial concerns, significantly reducing employee turnover. Offering personalized financial advice and support can also make a substantial difference in an employee's financial wellbeing. Such practices not only help employees in their current financial situation but also equip them with the skills and knowledge for future financial stability.
Beyond the Paycheck
Improving financial wellbeing isn't just about enhancing pay scales. It's about nurturing an environment where employees feel valued and heard. Conducting employee satisfaction surveys and fostering open channels for feedback can help understand the unique financial challenges faced by staff. By addressing these challenges with empathy and actionable solutions, employers can create a more loyal and stable workforce.
This holistic approach extends to creating a supportive work environment where employees feel that their financial concerns are acknowledged and addressed.
Transforming the Industry Standard
The high employee turnover in hospitality, retail, and restaurants has long been viewed as an unavoidable norm.
By prioritizing employee financial wellbeing, businesses are not only critiquing this status quo but are actively working towards a more sustainable and employee-centric model. This shift is crucial in reshaping the industry and ensuring a more satisfying and stable working environment for everyone involved. It represents a move away from viewing employees as temporary assets to seeing them as long-term partners in the success of the business.
Tips for supporting financial wellness in the workplace
The first step to supporting financial wellness is understanding the types of problems and worries your employees may be dealing with. Have they recently had to part with a large sum of money for an emergency? Are they struggling to make repayments on a loan? Is the rising cost of living forcing them to dip into important savings?
Whatever it may be, if an employee is in financial difficulty, there’s a good chance they are feeling isolated. Showing concern and empathy will help them feel more relaxed and well-positioned to find appropriate solutions. This, in turn, will help you create a positive workplace culture where people feel comfortable speaking about money.
As a whole, we need to normalize conversations about money. Talk Money Week, which takes place every November, is a great step in the right direction. The awareness campaign encourages people in the UK to talk about money management and recognise the work being done by thousands of organizations around the country to improve financial wellbeing.
Implementing an effective financial education programme will go a long way in boosting employee financial wellbeing. Providing your staff with access to the right advice and resources will help them manage their finances and empower them to go on to make better financial decisions. This could come in the form of online budgeting tools, mental health resources, money management software, debt advice services, and investment advice and management services.
Mental Health at Work, an online gateway developed by mental health charity Mind, has some great free tools, resources and case studies on its website, including a simple guide to debt from the Bank Workers Charity (BWC) and practical guidance for employers from CIPD, the professional body for HR and people development.
A lot has changed over the last couple of years. The Covid-19 pandemic has significantly impacted the way people work, and workers’ expectations have shifted as a result. Remote and flexible working has accelerated and there is more pressure on employers to offer a diverse range of perks.
The number of job vacancies in the UK reached a record high of 1.3 million in the three months to May 2022. To address this, understanding what matters most to young professionals at work, as well as what turns them off, is crucial.
Gen Z (under 25s) are rapidly entering the workforce, and just like millennials, Gen X and baby boomers, they have their own specific attributes and behaviors. According to Indeed, this demographic is competitive, entrepreneurial and open to embracing change – some of their key values are flexibility, in-person interactions and working with modern technology.
Have you considered introducing a benefits package to support multigenerational staff under financial pressure? This can encompass everything from special discounts and rewards to annual leave policies, retirement planning support and wellness programmes. You could even offer staff free access to a professional financial advisor and provide HR teams with relevant training so they can deliver one-to-one coaching sessions.
Empowering Employees, Empowering Businesses
The concept of employee financial wellbeing extends far beyond mere earnings. It's about creating a supportive ecosystem where employees feel financially secure and valued. This approach not only enhances employee retention and satisfaction but also propels businesses towards greater success and stability. As service providers to these industries, the goal is to empower businesses to make these critical changes, leading to a more prosperous and equitable working world. This empowerment translates into a more motivated, productive workforce and a business environment that thrives on the principles of mutual respect and support.
Utilize financial wellbeing tools
Financial wellbeing tools will improve the financial wellness of your workforce while enabling you to streamline business operations, retain staff, reduce turnover and cut costs.
Here at All Gravy, our suite of products gives hourly paid employees within the retail and hospitality sectors access to a percentage of their wage after completing shifts, without impacting cashflow.
The app, which synchronizes and connects with your payroll and workforce management systems, provides a full overview of employees’ finances, which removes financial stress and supports them in budgeting and building savings. Because staff can get paid straight away, they are more motivated to take shifts. This creates a happier, more productive and financially empowered team.
Boosting financial wellness with All Gravy
Since launching in 2020, All Gravy has signed over 150 hospitality businesses, and we recently secured €3.2 million of seed funding to take our services and support to the next level.
Since 2020, All Gravy has gone from strength to strength. We recently secured €3.2 million of seed funding to take our services and support to the next level and launch into the UK market.
One of the businesses we work with, Madkastellet, an innovative catering company with 18 locations in Copenhagen and close to 500 employees, has found that, since adopting All Gravy, employee satisfaction has improved, the number of shifts taken by employees has increased and hiring costs have reduced significantly. According to the HR team, it has also given Madkastellet’s youngest employees a much better understanding of their taxes and paychecks.
We want to help you support your hourly paid employees so they feel secure and in control of their finances. Find out what we can do for your organization's financial wellbeing and experience our unique people system for yourself by booking a demo.