Are you looking after the financial health of your workforce?
You probably understand the value of physical wellbeing. And you’re probably starting to learn a lot more about mental wellbeing. But financial wellbeing is still a very murky area for employers – and it impacts both the physical and mental health of your employees.
Dr Shaun Davis is the Global Director of Safety, Health, Wellbeing and Sustainability for the Royal Mail Group. And at the second annual Mad World Summit, he spoke to the room about the importance of supporting the financial health of your employees.
So today, I’d like to look at some of the lessons we can learn from Dr Davis.
The three ingredients of positive wellbeing
During his PhD, Dr Davis did a lot of work around what he calls the ‘triangle’ of good wellbeing. Each point on the triangle contributes to an employee’s overall wellbeing.
“You’ve got physical health, mental health, and financial health, each making up one point on the triangle” he explains. “Now, you might think ‘so what? What does that actually tell me?’ Well, in a very simple way, your financial health has an impact on your physical health, which has an impact on your mental health, which has an impact on your financial health, etcetera.”
Dr Davis says it is very important to understand that these three ingredients are not independent of each other. He says that they are all interdependent – and if you’re not looking after one, then the other two will be getting weaker.
For example, if you can’t afford good food, then this can impact your physical health. Or if you are mentally unwell, you might struggle with your budgeting, which will impact your financial health. And so on. All three elements are strongly connected.
And that’s why it is good that we consider physical and mental wellbeing within our workforce, but it is even better if we include financial health as part of the equation.
34% of employees say their financial situation impacts their mental health
Dr Davis says that when constructing arguments for investment to support things like financial and mental wellbeing, it’s important that you arm yourself with facts that outline the business case, as well as facts that encourage people to think with their hearts.
“There are a lot of interesting statistics out there that show how the three points connect” he says. “One that really jumps out at me, is that 34% of employees report that their financial situation negatively affects their mental health.”
Dr Davis says that 18% of employees already believe that their employers support them with this. But what about the other 82%? The big question here, is what can – or even what should – employers be doing to support, inform, and educate those that might be in financial stress?
Finding the right balance of responsibility
Dr Davis says that one of the biggest questions that crops up when he has this conversation with people, is: where do you draw the line between the role of the employer, and the “pastoral care dimension” for employees? And Dr Davis admits that you can’t go around creating quasi-financial institutions within your business – just like you couldn’t create a quasi-NHS.
What he in fact suggests, is helping employees to help themselves.
“It’s about promoting the idea of owning your own wellbeing” he explains, “whether that is financial, physical or mental. And about them knowing where they can go to get help, advice or support.”
Dr Davis says that at the Royal Mail, they have tried to work financial health into their other offerings, such as within their “Feeling First Class” EAP, as well as their other flexible benefits programmes. He says they are also looking at new ways to take the financial health debate right across the organisation.
“We look at how we can work together with other functions like HR” he says, “and at how we can better signpost the services available, in ways that our employees will engage with.”
Financial education vs financial support
Dr Davis is very enthusiastic about initiatives which educate employees on matters such as personal finance and basic budgeting. But when it comes to providing certain forms of direct financial support, he says that he’s not sure – the jury is still out.
Financial support is not a new concept for employers. For example, offering weekly pay is a common format, which in theory, is meant to help employees to budget better. And wage advances, or employee loans, even have their own set of tax and NI rules. But not everybody thinks that these types of financial support are good ideas.
“With weekly pay, there’s an argument that you budget better” says Dr Davis. “But you’ve not really got that long term view. And wage advances keep moving up and down my ‘do I like it’ scale. Because in one sense, I see it as really enabling – it deters people from going to less favourable outlets, like payday loans or loan sharks. But then it does have that kind of snowball effect, where you’re constantly living off next month’s wages.”
And that’s why prevention is much better than the cure – if you can help your employees to make smart financial decisions in the first place, then you won’t have as many tough decisions to make as an employer, further down the road.
Dr Davis and Andrew Kinder have recently published their second book, Positive Mental Health, which goes into more detail about improving mental wellbeing in the workplace, and is available from LID Publishing.
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