The disconnect between employees & employers regarding financial wellness
According to the 2018 Merrill Lynch Workplace Benefits Report, it is agreed that advice from a professional is the most helpful resource in improving financial wellness. However, only 31% of employees are participating in financial wellness programs. What is the disconnect?
NAB studied 2,006 Australians to determine that two thirds of adults (70%) face some level of financial stress or vulnerability. With the cost of living on the rise and the average household debt being twice as high as it was a decade ago, it’s no surprise that a large portion of Australian employees are experiencing financial stress.
Do employers have a responsibility to ensure employees have a positive relationship with their finances? Lisa Margeson, head of retirement client experience and communications for Bank of America Merrill Lynch thinks so, stating that “employers need to be sure they’re speaking the language of their employees.” And it certainly should be a priority with AMP’s research showing that financial stress leads to $47.2 billion in lost revenue per year across Australia due to presenteeism and absenteeism.
Employees are increasingly incorporating workplace wellness plans, however only 31% of employees participate in offered plans. One reason employees said they demur is because they “don’t offer services of interest to me.” There’s clearly a disconnect between what workplace wellness plans are offering and what is needed for employees to feel financially well. One of the key reasons for this, according to the Merrill Lynch Workplace Benefits report is that employers “tend to focus on actions to manage workers’ immediate financial needs, like budgeting and handling expenses. But employees prioritize long-term financial goals, such as ways to help them save and invest for the future.”
Financially stressed individuals tend to focus on short-term solutions, like managing debt, which leads to increased anxiety around finances. In contrast, individuals classed as ‘financially well’ focus on longer term goals such as planning for retirement and good savings habits. Ultimately, it’s no secret that financial wellness leads to higher productivity, improved company culture and stands to save Australian companies $47.2 billion in lost revenue due to financial stress.
“2018 Workplace Benefits Report” Merrill Lynch Bank of America study
Financial Stress in Australia – Mccrindle Research Paper in partnership with The Financial Wellness Group
AMP (2016) Financial Wellness in the Australian Workplace [Sydney, NSW]
Marjolin, Axelle & Muir, Kristy & Ramia, Ioana & Powel, Abigail & Centre for Social Impact et al. (2017). Financial Resilience in Australia 2016: Why is financial stress on the rise? Centre for Social Impact for the National Australia Bank [Sydney, NSW]