Why financial wellness is a must-have employee benefit

Why financial wellness is a must-have employee benefit
Why financial wellness is a must-have employee benefitWhy financial wellness is a must-have employee benefit

In a study carried out by CIPHR in 2021, it was found that financial worries are the joint main cause of stress in the UK. In a study of 1590 respondents, 43% of women and 35% of men listed financial worries as their main cause of stress. Whilst stress itself is not an illness, there are direct connections between stress and mental health, including anxiety, depression and post-traumatic stress disorder. Mental health is the biggest cause of absenteeism from work in the UK.


In a report by Neyber in 2016, it was found that financial stress costs the UK economy nearly £121 billion each year. It was also reported that 17.5 million hours were lost due to absence from work because of financial stress. These figures are pre-pandemic and are likely to have risen since early 2020.


In many cases, financial stress can be because of pay issues at work, but it can also be caused by lack of savings and poor financial planning for the future. According to the Mental Health Foundation, employees affected by work-related stress lose an average of 24 working days per year.


Not only are employers financially affected by absenteeism due to financial stress and poor mental health, but they are also affected by ‘presenteeism.’ This is where the employee is present at work, but their productivity is significantly reduced either by poor mental health or through lack of recovery time from illness.


With statistics like these, employers are recognising how financial wellness is a must-have employee benefit – not only for the health of their employee, but also for the health of their business.


Whilst 82% of employers recognise that helping employees manage their finances would help reduce employee stress levels and improve their mental health, only 38% of employers offer financial training and support for their teams.


Businesses understand the link between good financial wellness and productivity


In 2018, The Financial Capability Survey determined that in the UK 22% of adults have less than £100 in savings and 17% of adults are forced to use a credit card, use an overdraft or must borrow to meet their monthly outgoings. For the next generation, financial management is not much better – with nearly 50% of 7–17-year-olds saying they receive no meaningful financial education – either at home or through their schooling. With these worrying statistics being reported by The Financial Capability Survey, it is recognised that more needs to be done to educate workers, and future workers, in the UK on their financial capability.


Reasons to improve financial wellness


So, what are the reasons for employers to invest in programmes to improve financial wellness?


Ø  Stressed employees have more absences and decreased productivity


Not only do employees struggling with financial issues have a higher rate of absenteeism, but they also have lower levels of productivity when at work.


In a report produced by the Chartered Institute of Personnel and Development in 2017, 25% of respondents stated that the stress of their financial situation had a negative impact on their productivity at work. In other studies, employees who are experiencing financial stress admitted to spending more than 20 hours each month, whilst at work, trying to resolve their money issues.



Ø  Financial wellness improves employee recruitment and retention


When recruiting new personnel, candidates are attracted by benefits. An employee financial wellness programme may not be needed or used by all employees, but having a programme reflects the value that a company places upon the well-being of their personnel. This has a positive impact on recruitment of new team members.


Offering employee financial wellness benefits increases loyalty to the company as existing employees feel valued and recognise that their employer cares for their well-being. Employees feel less stressed, more secure and more settled in their job. Morale, productivity and improved internal communication are also benefits.



Ø  Employees use financial training and support when it’s available


Improvements in financial wellness doesn’t just come by giving an employee a salary increase.


With 48% of children currently in education saying they don’t receive adequate financial training, the outlook for improved financial wellness is not promising without input from employers.


A study by the Financial Conduct Authority states that employees cautiously welcomed the idea of employers supporting them with their financial wellness but were not always comfortable in asking for assistance. In the findings, both employers and employees agree that if employees knew where to go for help and guidance, they would have better control and financial resilience and be more inclined to seek help where it was needed.



How does PayCaptain help with financial wellness?


Low financial resilience and financial stress are very real issues that are facing employees in the workforce,” says Simon Bocca, founder of PayCaptain. “This has a huge impact, not only on employees, but on employers too. It’s in everyone’s interest to offer solutions to support employees to improve their financial well-being. We place emphasis on helping employees manage their money better, which reduces the negative effects of financial stress in the workplace.”


PayCaptain has developed innovative solutions to help employees and incorporated them into the PayCaptain app:


Ø Direct payments can eliminate the risk of missing important payments such as rent, loans and credit cards. Employees can make payments directly from the PayCaptain App.

Ø Planned saving - PayCaptain makes it easy to save money every month. Employees can set up a savings plan in the App. The amount is then automatically transferred on receipt of pay, which eliminates the risk of spending rather than allocating money to savings. If the employee doesn't have a savings account, one can be set up through the App.

Ø Access to financial guidance - the PayCaptain App incorporates trusted financial guidance that can be accessed on demand. The PayCaptain team are also available to support employees directly with best practice information and advice for money management.

Ø Employees can create a personal budget with PayCaptain’s Money Planning Tool. Understanding income and spending is key to good financial well-being.

Ø Employers can encourage their employees to save by paying interest on savings balances or by matching the employee savings payments (similar to pension matching). Having some money saved for unexpected situations is a major influencing factor in financial well-being.

Ø PayCaptain’s unique “Flexible Payments” allows employees to choose exactly where, when and how they receive payments like bonuses, rewards and expenses. Employees can choose to receive their payment instantly, send it to their savings account or put straight into their pension pot.

Ø Allowing access to emergency funding – Employees benefit from ‘On Demand Pay,’ enabling them to access accrued earnings before payday in the event of emergencies. They can also benefit from automatic weekly advances. The option to access money in an emergency is a highly valued benefit and is quick and easy to receive money instantly via the PayCaptain App or via WhatsApp. Funds can be helpful for employees to manage their budgets on a weekly basis and keep funds protected for their bills and direct debits at the end of the month. This avoids the need to make costly payments using their credit card or use pricey short-term loan facilities.

Ø PayCaptain has developed a survey to evaluate how employees feel about their finances. The survey creates a score and recommends guidance which can help improve financial well-being. The information is confidential, but companies can view anonymised average scores to track financial wellness improvements over time.


In summary, when employees are struggling with financial stress, there is a huge impact on both employee and employer. There is a costly financial implication to businesses in both absenteeism and presenteeism, which can be addressed by offering solutions and support to employees to improve their financial well-being. With reduced absenteeism and an increase in morale, company-wide communication and productivity, financial wellness really is a must have employee benefit - not only for the health of the employee, but also for the health of the business.


If you’d like to understand how PayCaptain can help improve your employees’ financial wellness, please contact us to arrange a demo.