As we navigate through challenging economic conditions, it remains absolutely essential for business leaders to uphold the financial wellness of their workforce. Considering that 59% of employees acknowledge that their financial troubles detrimentally influence their performance, it's clear that companies cannot overlook the financial welfare of their staff.
These concerns not only affect an employee’s economic stability, but also cast a shadow on their mental health. Therefore, it’s incumbent upon employers to establish measures that support the financial and mental health of these individuals.
Job losses are sometimes unavoidable. But even the threat of this outcome can often have a devastating impact on the finances and mental health of those affected. CFOs must therefore keep this at front of mind when planning and shaping the future of their organisation. But, aside from obvious measures like salary increases, are there other ways businesses can protect the financial wellbeing of their workforce?
What is financial wellbeing in the workplace?
Financial wellbeing in the workplace is a significant aspect of an employee's overall health and satisfaction. It refers to the state where employees have control over their day-to-day, month-to-month finances. It also represents their capacity to withstand any financial shocks, they can meet their financial goals, and have the financial freedom to make choices that allow them to enjoy life.
An employee's financial wellbeing is not solely determined by their income level, but rather their ability to effectively manage their financial resources. This includes budgeting, saving, investing, and making informed decisions about spending.
Financial wellbeing can directly impact an employee's performance, productivity, and overall job satisfaction. It can lead to decreased concentration, increased absenteeism, and lower productivity. Company executives that prioritize financial wellbeing often provide resources, tools, and benefits such as financial education programs, retirement savings plans, and other such programs to help employees manage their finances effectively.
Investing in employees' financial wellbeing, can foster a more engaged, productive, and loyal workforce. Additionally, it can enhance the company's reputation as an employer of choice that values the holistic wellbeing of its employees.
Is the CFO responsible for financial wellbeing?
When it comes to financial wellbeing it isn't solely about profitability. Holistic financial wellbeing of a company includes its ability to generate revenue, handle debt, sustain liquidity, and allocate resources for future expansion. Given their in-depth comprehension of the company's financial position (and wider market dynamics), CFOs are optimally positioned to supervise and shape all these facets.
One of the primary ways they exert this influence is through the establishment of a fair and equitable pay structure. By ensuring that remuneration aligns with market rates, employee performance, and the company's financial health, CFOs can instil a sense of fairness within the organization, thereby fostering a positive work environment and enhancing overall employee wellbeing.
Beyond salary considerations, CFOs also play a pivotal role in designing comprehensive employee benefits packages. These can encompass elements such as health insurance, retirement plans, stock options, and more. Offering these benefits not only provides additional financial security for employees but also signals the company's investment in their long-term wellbeing.
In addition to providing practical resources, CFOs can also enhance employee wellbeing through educational initiatives. By adding financial literacy programs and facilitating learning opportunities on topics like budgeting, investing, and retirement planning, they empower employees to make informed financial decisions. This education serves to increase employees' financial confidence and autonomy, contributing significantly to their financial wellbeing.
The actions and policies implemented by a CFO have far-reaching implications for employee wellbeing. Through the development of fair pay structures, provision of comprehensive benefits and resources, promotion of financial education, and maintenance of organizational financial stability, CFOs create a supportive environment that promotes both individual and collective financial wellbeing.
What can employers do to support employee financial wellbeing?
Offer life and disability insurance
Employers can bolster their employees' financial stability through a variety of insurance options. Disability insurance steps in with financial support if a health issue prevents an employee from working. Life insurance offers a financial cushion to the families of employees in case something unfortunate were to ever happen. These safety nets can often prove to be an effective strategy for financial wellbeing.
Provide family and medical leave
Having access to family and medical leave is a vital element when fostering financial wellbeing among employees. This provision allows staff members to take necessary time off for their own or their family's health concerns, without the fear of job loss. Besides protecting their physical and emotional health, it also ensures they don't encounter unnecessary financial hardship during these challenging periods.
Promote a culture of open dialogue
CFOs can shape the company culture by encouraging open conversations about financial stress and mental health. Providing a safe space for employees to discuss these issues can reduce stigma and foster a supportive work environment.
One step is to implement support outlets for employees facing any such difficulties. This could include providing access to financial advisors, offering flexible working arrangements, or setting up an Employee Assistance Program (EAP) that offers confidential counselling services. As the financial stewards of the company, CFOs are uniquely positioned to champion this cause and drive a cultural shift within their organisation.
Implement pay increases and hardship grants
Salary raises can directly improve an employee's wellbeing. Everyone deserves to be paid fairly, both in relation to the job they do as well as changing economic conditions. In addition, hardship grants can provide immediate financial assistance to employees facing challenging circumstances. These grants can address expenses when they’re most needed, such as unexpected medical bills or emergency home repairs.
Promote education and resources on financial literacy
Offering educational materials on financial literacy is an effective way to build up employee financial welfare. Employees can also be equipped to make better financial decisions by attending workshops, seminars, or even using internet resources for investing, planning for retirement, or budgeting.
Allow flexible scheduling and provide child
Flexible scheduling enables staff to better balance their work and personal lives. Along with childcare assistance, it can significantly alleviate the financial and emotional burden associated with juggling professional and familial responsibilities.
Organise financial wellness activities
Lastly, introducing financial wellness activities, such as regular financial health checks or webinars on tax best practices, can aid employees in their financial wellbeing endeavours. Such initiatives, when done as part of a community, help to make financial learning fun and interactive.
How can Cloud technology improve financial wellbeing?
Cloud technology significantly enhances a business’s financial wellbeing by offering agility, scalability, innovation, and unparalleled access to financial data. Each transaction and task fulfilled by the finance team is meticulously documented, with an unalterable digital trail that can be tracked from end to end. When employees are subjected to such financial transparency and proficiency in their working lives, it should be easier for this culture to seep into their personal lives too.
Our Cloud-based accounting solution, Advanced Financials, enables cohesion within an organisation’s finance department, with all-encompassing functionality around the likes of payroll, accounts payable/receivable, reporting, expenses, asset management and bank reconciliation. Cloud technology ultimately represents much- improved cost-effectiveness, as it allows companies to reduce unnecessary spend, have a greater view of their financial health, and enforce more streamlined/consistent methods.