Is Personal Finance the Key to Employee Well-Being?

James Agnew
November 17, 2021

In 2021, 1 in 4 employees quit their job or 25% of the entire workforce. As of October, according to Joblist's third-quarter report, over 73% of active employees are considering leaving their jobs soon. So what is causing this mass exodus or 'The Great Resignation', and what can employers do to keep their employees not only interested in staying but satisfied in their positions? 

It is a safe assumption that employees across the nation are unhappy to some degree, impacting their overall employee well-being. Well, what is employee well-being? No, it is not just having 'mental health day's as added benefits (although that is a considerable plus). 

Employee well-being is a multi-pronged concept covering all aspects of one's financial well-being, social well-being, physical well-being, emotional well-being, career well-being, sense of community, and sense of purpose. All of these seven components intertwine and intersect to impact overall employee well-being and job satisfaction. Many might make the argument, "well, we offer free gym memberships to our employees" or "we have virtual happy hours to create a sense of social community", but is that enough? Are each of these factors created equal, or does one stand above the rest? Let's break them down a bit to uncover the driving force behind employee well-being. 

Physical Well-Being 

It goes without saying that when we take care of ourselves, we get enough sleep, eat right, drink enough water, and get an adequate amount of exercise, our lives improve to some degree. But what happens when your job begins to interfere with your physical well-being. In corporate America, a large portion of positions require sitting in front of a computer screen for hours on end. To a degree, employers should take an interest in their employee's physical well-being. Offering discounted or free gym memberships is a great benefit to combat the sedentary lifestyles most jobs require. If an employer has a break room with snacks, providing healthy alternatives is another way employers can step in and help. Still, ultimately, physical well-being is on the shoulders of the employee. Employers cannot be expected to monitor employees' eating, sleeping, or exercise habits, but they can absolutely offer support where needed. 

Social Well-Being & Sense of Community

Since the COVID-19 pandemic began, this is a big one. While many prefer the laid-back work-from-home lifestyle, it does have its downfalls and can be incredibly isolating, especially for those who live alone. Investing in relationships both inside and outside of the workplace is incredibly important to overall well-being and can spill over into various areas of life if not tended to. We are social beings designed to interact with one another — and if lockdowns have proven anything, it is that isolation only breeds loneliness, anxiety, even depression. But even social well-being is heavily reliant on the employee. Employers can aid where they can and provide social opportunities for employees to engage, but this one also falls on the shoulders of the employee. On the other hand, creating a sense of community where employees feel safe, heard, and valued is imperative to a healthy work environment and employee retention. 

Emotional Well-Being 

For generations, career politics have dominated corporate America, endorsing unhealthy or toxic habits under the blanket term, "that's just how it is". Today's generation, on the other hand, wants nothing to do with that. Millennials and Gen Z particularly are ushering in a new era of workplace politics exposing toxic behaviors and expectations by employers, managers, and co-workers alike. Now, an employer is by no means responsible for an employee's emotional well-being outside of work hours and within their personal lives — but, and it is a big but; providing options for emotional support and cultivating healthy, productive, and constructive workplace policies is instrumental in an employee's emotional well-being. Everyone's life is hard to some degree, everyone is always dealing with something in their personal life; being sensitive to that and creating a workplace that helps rather than hinders speaks volumes. 

Career Well-Being & Sense of Purpose

Tightly intertwined, career well-being and sense of purpose do play a rather decent role in employee well-being. Why is this? Employees want to know that they are on a journey to meet their goals and doing work that they can be proud of and make an impact — whether that is on a global scale or even in the life of one person. Many employees turn resentful for their employer when they feel like they have hit a dead-end in their career and have no opportunities for growth or simply feel like what they are spending time doing day in and day out has no purpose. This can also come down to the work environment — are they working 12-hour shifts on their feet? Do they have the flexibility to work from home? Does their current career support their lifestyle and the lifestyle of their family? All important questions employers should be taking note of when considering employee retention and satisfaction, but one central theme is hitting across the board as the number one cause for damaged employee well-being: finances. 

Financial Well-Being

Over the past two years, the world changed. There is no doubt about it. From remote work to inflation, supply chain crisis, social unrest, political change in powers, and everything in between, the nation is at a pivotal turning point for both employers and employees across the country. Food prices are going up, home prices are going up, student loans looming, rent has skyrocketed across the country, but wages have stayed stagnant or even dropped. At the beginning of the pandemic, companies were forced to lay off a great deal of employees or lost employees to unemployment benefits. Now, these companies are attempting to build themselves back up, but may not be able to afford employees at the rates they just offered. I spoke to a gentleman this week who has been on over 30 job interviews in the past 6 months, none offered him over $50,000 for a management position where he formerly made $75,000. The landscape of corporate America as a whole has changed. 

So how are employees feeling, and why are they choosing to leave? 

According to PwC's 10th annual Employee Financial Wellness Survey, 63% of employees admit to increased financial difficulty and stress since the onset of the pandemic. The highest age demographic impacted is millennials at 72, and the lowest impacted were baby boomers at 46%. The study concluded that employees who are experiencing deep financial strain from the COVID-19 pandemic are four times more likely to struggle to pay their monthly expenses, 57% more likely to ignore medical needs due to the cost, and 72% more likely to leave their current employer for one who values their employees financial well being. 

Now, what does this mean? Does this mean employers should just up their wages and call it a day? Not exactly, but an increase in wages certainly helps. Employees want to know that their employer is invested in their overall employee well-being, which, as data suggests is heavily reliant on financial stress. 

The same study found that 87% of employers are eager to help, but may not exactly know how to help outside of increasing wages, which may not be a viable option in some cases. A similar study by Bank of America's 11th annual Workplace Benefits Report revealed that 95% of employers feel a sense of responsibility for the financial wellness of their team, as it directly impacts their work performance, output, attitude, and longevity. 

So what can employers do to help?

There are a variety of options available to employers across the nation who are seeking to help their employees improve their financial wellness and quality of life.

The obvious option would be an increase in salary to combat the rising inflation costs. After all, employees are providing a service for which they are compensated based on their work quality and skillset. But, more and more employees are turning to freelance to be paid what they believe they are worth for those skills and that time — but that is a discussion for another time, if you haven't read my blog on the future of freelancing, click here. {link the last blog}

But again, that may not be an option. Help can be something as simple as financial education resources offered in the workplace. This can be workshops, counseling, courses, and anything in between to simply educate employees and equip them with the tools they need to achieve financial wellness and stability. 

The most popular option would be to revamp benefits packages to include financial wellness initiatives from scholarship opportunities, childcare benefits, debt counseling, a budget coach, profit-sharing initiatives, employee stakeholder opportunities, and much more. 

As the pandemic begins to work its way out, we are looking at a completely different corporate America than the one that came before the pandemic. Everything has changed, and modern problems require modern solutions. To retain top-tier talent and cultivate a workplace worth staying and thriving in, employers must consider the financial wellness of their employees and create initiatives and benefits to provide tangible support.