With the cost of living increasing and economic conditions tightening, many of us are finding it a struggle to manage our personal finances. In February 2020, the Financial Conduct Authority reported that 5.8m people were struggling to pay bills and credit repayments in the UK, 3 years later and the figure had almost doubled to 10.3m. While this has since reduced to 7.4m in January 2024, the pressure is still on. The sheer volume of people affected has given rise to a new mental health category – financial wellbeing.
What is financial wellbeing?
Defined as the state of being financially secure, financially healthy, and having the freedom to make choices that allow individuals to enjoy life, financial wellbeing encompasses more than just our salary. Financial stress can adversely affect our mental health, job performance, and overall wellbeing.
In sectors such as hospitality and retail, where irregular hours and seasonal fluctuations in business are common, employees may face additional challenges in managing their finances effectively. Addressing financial wellbeing within the workplace not only enhances employee morale by easing stress, it also reduces absenteeism and turnover rates, ultimately leading to a more stable and productive workforce.
Supporting financial wellbeing
There are a number of ways to support the financial wellbeing of your team without needing to offer extortionate salaries. Giving teams the tools they need to manage their finances is just as important.
Financial education and counselling:
Working with local financial advisors or partnering with local banks to organise regular workshops on budgeting and saving will help employees of all ages and life stages get to grips with managing their money better. Your team may not have the financial literacy life skills they need, so offering educational opportunities can empower them to make informed financial decisions. If you partner with a bank or building society, you could schedule private appointments on site, giving staff the opportunity to talk about their finances and arrange the support they need, instead of ignoring the issue or having to make time during their lunchbreak or day off to do it.
Recognition and incentive programs:
Recognise employees’ contributions through a transparent and fair rewards system tied to performance metrics.
Tips are one of the biggest perks of working in the hospitality sector, but look a little harder and you can find a series of great benefits that will be meaningful to your team.
Partnering with a local garage to arrange a car maintenance and repair service via a salary sacrifice scheme that delivers savings and spreads the cost of MOTs, services and repairs can ease the burden of keeping your team safe on the roads. Alternatively, you could help make Christmas more affordable with a savings club that employees pay into throughout the year and delivers a discount with local shops or interest rate bonus as the festive season approaches.
By fostering a culture of open communication about financial matters and creating a supportive environment where employees feel comfortable discussing their financial challenges, you will learn more about what means the most to them, enabling you to adjust your program accordingly for continual improvement. As the industry struggles with staffing gaps, understanding what makes your team tick will help you get closer to becoming an employer of choice and will reap long-term rewards for you both.
