The effect of financial advice on employee wellbeing

Debbie Gyde, GM of Customer Partnerships at AMP, looks at how financial wellbeing programmes can significantly affect how our people feel at work.

Most businesses know how critical an employee wellbeing programme is in creating a successful organisation, but many still overlook a vital component of those programmes: financial wellbeing.

Financial instability is not just a personal issue for employees; it’s a significant workplace concern for the entire business. There has never been a better time to consider the importance of building a financially capable workforce and reducing financial stress, especially during a tough economic environment.

That’s why it’s time for employers to recognise the profound effect financial stress can have on their workforce and take proactive steps to address its often ‘hidden’ costs.

Recent surveys paint a concerning picture of financial stress among New Zealanders. A staggering 70 per cent of us now worry about money weekly, even daily, up from 60 per cent in just four years, according to the Financial Resilience Index tracker Furthermore, studies show that 80 per cent of workers think stress about money negatively affects their work productivity

The ripple effects of financial stress extend far beyond reduced productivity. It can lead to increased absenteeism, higher turnover rates and lower employee morale.

All these ‘consequences and percentages’ underscore exactly why implementing a comprehensive financial wellbeing programme isn’t just about being a good employer, it’s a smart business decision, too. Companies that prioritise employees’ financial health often see higher retention and engagement rates, improved ability to attract top talent and stronger employer–employee relationships. PWC research shows that 73 per cent of financially stressed employees would be attracted to another employer who cares more about their financial wellbeing.

By investing in financial wellness programmes, organisations can position themselves as employers of choice in a competitive job market. Fortunately, employers are uniquely placed to have a positive effect on the financial wellbeing and retirement of their people, through the benefits they offer.

To deliver this, employers need to plan effective programmes that provide meaningful improvement in financial outcomes, because the only real way to improve financial wellbeing is to improve outcomes.

That’s why an effective financial wellbeing programme has to be multifaceted, addressing wider aspects of an employee’s financial health. Important considerations might include:

• financial education: workshops and seminars on budgeting, debt management and investment basics

• one-on-one financial advice: access to qualified financial advisers for personalised guidance

• retirement planning: enhanced KiwiSaver contributions or workplace savings schemes

• digital tools: budgeting apps and financial planning software to help employees track their finances.

One of the most effective elements of a financial wellbeing programme, and a good place to start, is access to professional financial advice.

Employees who receive financial advice tend to have better financial outcomes, including higher growth in their investments; up to 4 per cent higher, according to a 2020 study by the Financial Services Council. This not only improves their current financial situation but also helps set them up for a more secure future.

However, financial wellbeing programmes aren’t a one-sizefits-all proposition.

It’s essential to recognise that financial needs vary across different demographics. For instance, the latest Wellness at Work NZ report highlights that financial stress is the main source of stress for Gen Z employees, with 48 per cent feeling stressed at work at least a few days a week. By offering tailored programmes that cater to different life stages and financial situations, employers can ensure their initiatives resonate with all segments of their workforce.

And the ripple effect of those initiatives can be far-reaching. Improved mental health and reduced stress, increased job satisfaction and loyalty, better physical health due to reduced financial anxiety and stronger relationships both at work and home can all result from effective financial wellbeing.

That’s why, as HR leaders, you have a unique opportunity to make a significant impact on your employees’ lives and your organisation’s success. By integrating robust financial wellbeing programmes into your overall wellness strategies, you can create a more resilient, engaged and productive workforce, not to mention helping them build a secure financial future.

Truly successful financial wellness programmes are able to change both money attitudes and everyday behaviours that have lasting effects. Programmes that have a meaningful impact create a culture that supports financial independence.

Source: PwC Financial Education Report

All of this is why AMP has developed a market-leading workplace wellbeing programme for its corporate clients, to help employers address these burning financial issues and help Kiwis prepare for a secure financial future.

We have recognised a significant gap in the market for end-to -end solutions for workplace wellbeing and launched an integrated education and advice programme designed to arm employees with the tools and skills they need to build financial capability and confidently plan for their financial future, catering to graduates, retirees and everyone in between.

The programme has KiwiSaver at its core and offers support for employers focused on outcomes, capability and behaviour change.

Debbie Gyde is GM of Customer Partnerships at AMP. The company has developed a market-leading workplace wellbeing programme for corporate clients, to help employers address the burning financial issues raised in this article. AMP is on a mission to help Kiwis prepare for a secure financial future. The message is clear: “Unfortunately, retirement isn’t free. Fortunately, we can help with that.” If you’d like more help or information, contact our team via www.amp.co.nz/for-employers