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In the past, when employers considered financial wellness, they were examining the overall financial health of their business. But this terminology is quickly changing, as in most cases, it’s now being used to reference the sense of security employees have regarding the amount of money they have to meet their needs.

Over the last few years, we’ve been seeing a huge evolution in employee benefits, with superficial offerings such as ‘free snacks’ and ‘pool tables’ taking a back seat to financial wellness programs.

Now following the COVID-19 pandemic and the enormous amount of uncertainty that has subsequently resided in our day-to-day lives, financial wellness is quickly gaining further momentum.

However, with this trend remaining a relatively new benefit in the workplace, many questions still surround it.

So, we’ve compiled everything you need to know, helping you make an informed decision when deciding if this is something you want to explore in your business.

What is financial wellness?

As briefly mentioned in our introduction, financial wellness relates to your employees’ financial situation which can be impacted by existing or ad hoc expenses.

Everyday Health found that finances are the most common source of stress among men and women.

For example, expenses such as a fridge breaking can impact an employee’s financial wellbeing as it’s an unexpected cost that depending on their current situation may require them to take a loan.

Additionally, ongoing bills such as rent, mortgages and commuting can also mount up and have a detrimental impact on their wellbeing, resulting in many turning to expensive payday loans.

A study from Finder, the UK’s fastest-growing comparison site, discovered that 53% of payday loans are used for living expenses.

Why is financial wellness important?

Ultimately, an employee’s financial stability links directly to their performance within the workplace, and money-related stress can severely impact productivity and increase absenteeism.

Due to this, financial wellness has become an increasingly hot topic for those businesses looking to optimise engagement and productivity.

What has COVID-19 meant for financial wellness?

COVID-19 has created an enormous amount of financial uncertainty with more people than ever facing difficulties, especially those who have either been out of work or on furlough.

Young people in particular are reported to have far fewer savings and on average spend much more of their earnings, meaning the pandemic has been especially challenging for them.

What can you do to support financial wellness?

A number of approaches can be used to improve financial wellness, including:

The continued growth of technology and the introduction of Open Banking has also meant that a range of modern services such as IRIS Earnings OnDemand have arisen.

These services provide employees with the option to access a portion of their upcoming wage prior to payday without turning to extortionate lenders.

If you’re trying to determine what is best for your business, we can help.

IRIS HR Consulting offers a range of services in which we use our experience to analyse your business, determining the perfect solution.

For more information, click here or to speak to our team, give us a call on 1-800-935-0895.