Financial problems are intimate and personal. The last thing a member of your staff wants to do is bring up a financial matter at work. When it does happen, it's a very difficult conversation to have with a manager or a peer and as a result most staff would rather suffer in silence.
When staff face financial challenges, it affects their job performance. Money matters keep them from doing their best work when they aren't fully engaged. The increased stress levels can lead to anxiety and depression as well as having the potential to cause damage to their health. As leaders in the HR space it's important that you have necessary tools and processes in place identify these issues early and have the resources available to help.
Telltale signs of finance-related stress
Finance-related stress can manifest in subtle ways. These are some cues that you can look out for to identify people that might be in need of some assistance:
- Are your staff asking for multiple wage increases in quick succession?
- Are your staff asking you for a loan or an advance on their wages? Is this a regular occurrence?
- Is there a high absenteeism rate and consequently a loss of productivity in your business?
- Do your staff frequently job hop creating a high attrition rate and operational hiring cost?
Without staff coming to you directly to talk about their financial problems it is difficult to be aware of what is going on with each member of the team. This is overwhelming at times and perhaps you just don't know where to start?
We suggest going with a three-pronged approach. First building knowledge of what is happening within your team by getting data about the problem. Secondly, provide flexibility as to how team members access their wages with guardrails to protect them but importantly helping you build trust and understanding. Third and most importantly give them access to a platform with tools to educate them on money management and tools to help them master their money management by planning and budgeting their hard-earned wages. We believe the combination of these support mechanisms allows for long term sustainable behavioural change.
Ensure you know what your staff are struggling with
Relationships are built on trust. Creating trust and building a strong employer-employee relationship is a vital first step in ensuring you start breaking down the barriers that prevent open conversation about money and finance-related issues in the workplace.
It can be a valuable exercise to send out a financial wellness survey to your staff. This will allow you to build up an understanding of what people might be struggling, where the big problem areas are and if there are critical cases that require immediate intervention. This is a great method to generate actionable insights from your data. Make this a regular occurrence to keep your finger on your company's wellness pulse.
Important to note when running any surveys or one-on-one's, do not discriminate between high and low income earners as it's a common belief that your financial wellbeing is dependent on how well you get paid. That is not the case as some of the highest rates of financial worries are from those in the higher income brackets.
Provide flexible access to earned wages
An employees' emergencies rarely align with payday with those life challenges always popping up when money is tight in the month. Sometimes when employees need quick cash, they are forced to run to expensive payday lenders that charge excessive interest rates for short-term loans. This creates enormous strain on an already strained budget as the compounding effect of this interest can become a difficult thing to manage as people can quickly find themselves battling to get out of a debt trap.
HR leadership can help by allowing staff access to a portion of their earned but unpaid wages before payday through a financial wellbeing platform such as Floatpays . This provides a safety net should cashflow issues arise for your staff and is a safe and responsible way to ensure they don't create debt.
Because a system like Floatpays is run from an employees' own device in the form of an app, there is no need for an embarrassing conversation around salary advances as the employee is in full control of their own money, providing much needed psychological safety through a dignifying process. These systems all have protection mechanisms in place to ensure only a small percentage of an employees' unpaid wages can be accessed at any given time during the month to ensure responsible use.
Empower staff with the knowledge to master their money
Due to the lack of financial education and training provided by schools or parents generally, most people don’t understand how to budget, the necessities of what is means to be in debt or how to manage things such as credit cards and loans.
HR leadership should ensure staff are educated on on how to take control of their day-to-day money management and properly plan for their financial future. Offer them a financial education tool or platform to help them with this as setting them up for success is a win-win for both of you in the long term as such a tool will equip them with the knowledge to make better money decisions.
Look into providing your teams with a planning and budgeting tool as well. Through this you can empower them to plan for upcoming expenses, keep track of spending habits and navigate the complexities of day-to-day money management.
Helping your staff in these ways is a good start towards improving your workforce’s financial wellness because when employees no longer have to deal with finance-related stress, it results in higher productivity, retention, and engagement.
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