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April 18, 2023
The Importance of Financial Wellness for Employee Mental Health
Written by: Espyr
Businesses are changing how they view workplace satisfaction as they’ve gained awareness of how strongly employee well-being impacts a company's performance and overall culture. Though businesses pay their staff for work rendered, the idea of promoting general financial wellness is often overlooked, even as employees list it as one of the most common sources of their stress.
Today’s work environments are fast-paced and combined with the increasing levels of stress faced by most working people and a difficult economic environment, virtually everyone is likely to experience financial stress at some point. Financial-related stress can have a significant and long-lasting impact on one's mental health, and those struggling financially are more likely to experience mental health issues that can distract from their work and personal responsibilities.
With technological and social advancements, employee well-being has become a bigger priority for employers and employees alike, and the importance of mental healthcare is no longer being overlooked. Financial well-being is a key component of employees' total well-being, and it can have a big impact on the employee's mental health.
Employers play an important role in promoting financial wellness and employee financial literacy. Financial literacy means understanding the importance of saving, the difference between good and bad debt, how to stick to a budget, and responsible spending.
What Is Financial Well-Being?
Financial well-being is the state in which you can fully meet your financial needs both now and in the future without strain. There is a sense of confidence that comes with being financially well, which means being confident and secure about the future.
For you to achieve a state of financial wellness, it's important to have financial literacy. One might show financial literacy in the way they set up and use a household budget, invest money for retirement, and consult a professional before making major purchases. Financial well-being is an important part of a person's general well-being and health and it's crucial to understand the role of financial wellness when it comes to mental health.
The Relation Between Financial Well-Being & Mental Health
Research has shown that financial and mental well-being are strongly correlated, and financial strain can significantly affect mental health. Anxiety, depression, and other mental health problems can result from financial stress, which could come from debt, legal worries, and family problems. When left unresolved, these mental health problems become frequently persistent or long-lasting, causing further financial stress.
Additionally, experts have discovered that money concerns are the biggest cause of stress for most people, outpacing worries about politics, family, and the workplace, while those with high levels of financial wellness are more likely to feel more in control, suffer less stress, and be generally happier. Studies have even shown clear links between financial wellness and mental health.
Financial wellness and mental wellness are interdependent in a circle. When one isn't doing well, the other frequently suffers as well. People may be reluctant to ask for assistance due to stigmas associated with debt or poor financial health.
Employers can have a significant impact on their employees' financial wellness. When employees feel financially secure, they are less likely to experience stress and anxiety, which in turn increases their productivity, work happiness, and engagement.
How Do You Support Your Employees' Financial Well-Being?
We proved that employers are crucial in promoting the general well-being of their employees. A happy employee means an engaged and productive employee. With that in mind, here are some ways that employers can effectively support their employees' financial well-being:
1. Access to mental health resources
Proactive employers offer benefits like health and wellness programs and fitness classes to relieve stress because they understand the importance of their employees' mental health while working.
Forward-thinking employers can implement Employee Assistance Programs (EAPs), which are part of a benefits package that offers both employees and in some cases their families private counseling services. EAPs provide free counseling, referrals, and follow-up services for employees in need
The role of Employee Assistance Programs (EAPs) in supporting financial wellness is:
- To offer readily available financial consultation or advice when an employee faces financial stress.
- Provide anonymous and confidential support. With HR, it proves to be difficult for in-person financial consultations as society today stigmatizes financial strain. HR professionals are not equipped to give financial advice and employees should have confidentiality in these matters. An EAP provides anonymous emotional support for employees facing financial stress before the stress begins to impact their mental health.
Another way that employers can help their employees manage their mental health and finances is by offering wellness programs like mindfulness, meditation, and stress-reduction training – a high-quality EAP will include comprehensive services like these.
2. Offering financial wellness programs
Businesses can create financial wellness programs that give employees the tools and knowledge they need to manage their money, pay off debt, and save for the future.
Providing workers with the resources they need to manage their finances might help them feel less stressed and anxious and keep mental health problems at bay because financial stress can have a big influence on mental health. Offering access to education and training on financial matters can have a big positive influence.
3. Encouraging work-life balance
Employers can support work-life balance by offering flexible work hours where appropriate, telecommuting options, and paid time off. Most businesses are promoting mental health awareness through the idea of "taking a mental health day," which allows an employee to get paid time off due to stress or mental health issues.
By allowing time off for rest and leisure activities, employers may help employees maintain their mental health and well-being while at the same time increasing their productivity.
4. Provision of competitive compensation and benefits
Getting a job that offers health insurance and retirement plans helps employees feel secure regarding their financial future. This will help reduce stress and anxiety, and such benefit packages attract and retain top talent. Offering competitive pay, bonuses, and regular raises will also help employees feel secure.
By cultivating a work environment with open communication, strong teamwork, regular recognition of employee achievements, and opportunities for professional growth, employers can create a happy work atmosphere. Your employees' mental health and well-being can be enhanced by a supportive, encouraging, and respectful work environment. HR can be proactive in helping to achieve these goals.
Financial well-being is essential for overall health, and it has a significant impact on mental health. The promotion of financial wellness and financial literacy among employees by businesses can improve workers' general productivity and mental health.
Financial stress is not limited to hard economic times, and employers need to be concerned with their employees' well-being regardless of the current economic climate. Actively using HR and creating a safe space for their employees to speak up when faced with financial challenges will help the most.
Your financial resources determine your financial wellness, which directly affects every area of your overall well-being. Having financial wellness can dramatically improve one’s life and prevent hardships
By providing financial education, employee financial consultations, and access to EAPs, employers can help their personnel achieve financial wellness and improve mental health at work.
Tag(s): Financial Wellness , EAPs , Mental Health , Benefits , Stress Management , Employee Burnout