Moving the dial on financial wellbeing

Of the 2.5 million people in the UK currently off work due to long-term ill health, 40% are suffering with stress, anxiety and depression. This has a massive impact on an organisation’s ability to perform and grow effectively, profitably and sustainably. The UK is ranked 7^th in the G7 and 17^th in the G12 for productivity which most people regard as unacceptably low.

Employee health and wellbeing has become a ‘business critical’ issue. It’s not a new phenomenon though. During the recessions of 2008 and 2015, when large numbers of people lost their jobs and people were fearful about their futures, we saw a significant deterioration in people’s mental health. The Covid pandemic, economic uncertainty and global events have exacerbated the problems to the extent that employers of all sizes are now having to prioritise the issues and find ways to tackle them head on.

The action-orientated National Forum for Health and Wellbeing at Work which we helped to set up at Alliance Manchester Business School, now comprises around 50 HR  and occupational health leaders from the UK’s major public and private sector employers, including Barclays, BT, John Lewis, Rolls Royce, the NHS Executive and the Civil Service – to name a few.

One of Forum’s key areas of focus has been the impact of the economic downturn and escalating costs on employees’ health and wellbeing, leading to the publication of an updated Financial Wellbeing Guide for 2023 which provides strategies to help organisations support their employees during the cost-of-living crisis

The guide warns that the longer term impact on productivity, staff absence and retention is likely to be profound – with 28% of employees surveyed for the report saying that financial concerns are already negatively impacting their performance at work.

It is clear that financial wellbeing needs to be recognised as an important strategic issue, like the Gender Pay Gap, for example, to ensure it attracts proper Government backing.

How do you make it acceptable to talk about money?

The Financial Wellbeing Guide is packed full of useful insights and strategies. Above all, employers need to remove the stigmas and encourage people to talk more openly about any money worries they may have and the impact this is having on their health and wellbeing.

As responsible employers, we must get better at communicating the issues, talking about the extent of the problems that people at all levels are having and helping to signpost solutions – alongside any financial management and wellbeing services and programmes available.

A lot of people worry that if they share their personal financial concerns with their line managers or employers, they will be judged harshly for it and that it may in some way reflect on their ability to do a good job or manage aspects of their role effectively. It’s imperative that employers find ways to dispel these fears and make it acceptable and normal to not only raise concerns, but to ask for help.

Some employers don’t want to address this as they are worried that the answer always has to be a pay rise – but this is not the case. Financial wellbeing is about being in control of your money and feeling positive about your financial future. It goes without saying that people should be properly rewarded for the work that they do – but they also want to be heard, understood and supported.

Putting the infrastructure in place to make a difference

One of the key starting points is to ensure the infrastructure is in place to enable organisations to monitor and manage employee health and wellbeing effectively.

Larger organisations should think seriously about appointing a Director of Health and Wellbeing reporting into the HR Director, Health and Safety Director or Chief Medical Officer, whose job it is to look after staff wellbeing. Reports should be scrutinised by the Boards of these organisations and include reviews of both objective elements (such as sickness absence and retention rates) as well as subjective considerations (including productivity, performance, trust, autonomy and flexible working), to enable them to identify the risks and take the appropriate actions.

In some sectors, this role is being outsourced to professional wellbeing consultants, which is fine too. Ultimately, someone needs to be responsible and accountable, with change being driven from the top.

At the other end of the scale, we believe that small businesses without the in-house resources and know-how to deal with the issues themselves, could really benefit from Government support. This could take the form of a quango which provides information and guidance as well as access to accredited consultants who can help smaller businesses to take action in a meaningful way.

During our research, it has been interesting to see that large businesses in some sectors, such as construction, are leading the way by providing health and wellbeing guidance to smaller companies in their supply chains. They clearly recognise the mutual benefits and it’s a trend that we hope to see more of.

We may think of wellbeing as a new thing but it is not. In 1968, just weeks before he was shot, Bobby Kennedy gave a speech in which he challenged the idea of using Gross National Product (now referred to as GDP) as an effective measure of a country’s success, rather it should be Gross National Wellbeing (GDP being only one aspect of wellbeing).

He said that Gross National Product “measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile.”

About the author

Professor Sir Cary Cooper CBE was a guest speaker at Allen Associates’ HR Hub in July 2023 when he took part in a conversation with Malcolm Gregory, partner and head of employment at RWK Goodman. This blog reflects part of a wider discussion.

Sir Cary is regarded as an international expert on organisational health and wellbeing. He has published over 200 books, is a past president of the CIPD and 50^th anniversary Professor of organisational psychology and health at Allied Manchester Business School at the University of Manchester. Read more about Sir Cary’s illustrious career or connect with him on LinkedIn.