Financial wellness is a cornerstone of an effective employee wellness proposition.

During the COVID-19 pandemic, South African companies started paying a lot more attention to mental and physical wellness in the workplace. Now, as we move into the next phase of the COVID crisis, financial wellness is likely to emerge as an increasingly important component of employee wellness programmes.

South Africans are already financially stressed, with many struggling to save for retirement. The data shows that many South Africans are already spending much of their income servicing existing debt or taking on new debt to pay for essentials. According to DebtBusters’ Q4 2021 Debt Index, demand for debt counselling in the fourth quarter of 2021 rose 18% year-on-year.

With consumers facing higher interest rates and stagnant income as well as soaring inflation, more employees are coming under financial strain. This matters to employers because financial wellness is closely linked to physical and mental wellbeing. Research from Sanlam shows that 57% of South Africans cited financial stress as having had the most impact on their mental wellbeing during the pandemic.

When employees are struggling with anxiety or depression due to financial problems such as loss of income or inability to pay their debts, it can affect their productivity, health and even their workplace attendance. When they can’t pay their debts, many employees will turn to their employer as the lender of last resort. Employers thus have a vested interest in helping their people to improve their financial wellness.

Defining financial wellness

According to Tom Rath and Jim Harter – leaders in workplace wellbeing research at Gallup – financial wellness is “effectively managing your economic life.” This includes spending money within your means, being financially prepared for emergencies, making good financial decisions and planning for your future financial needs.

Company financial wellness programmes thus aim to help employees reduce money-related stress and budget better. For leading employers, this is no longer only about supporting salaried employees with retirement funding—it’s also about providing the tools and information they need to manage their money and the impact of their finances on their overall wellness more effectively.

Financial wellness is a concern for employees, whether they are lower income earners or comfortably middle class. In fact, Fedhealth reckons higher income earners suffer more from panic attacks and depression than any other income group. However, what employees from different income groups need from a financial wellness programme will differ considerably.

With that in mind, here are some tips from Fedhealth and money psychologist, Winnie Kunene, about what companies could include in a holistic financial wellness programme:

  • In addition to health and retirement plans, employers could consider disability insurance or funeral policies as part of the benefits package.
  • Employers are in a good position to offer financial literacy training and financial planning advice via media such as seminars and webinars.
  • Companies could also have a debt counsellor on call to answer employees’ questions about debt.
  • Companies can help employees check their credit reports, provided they get the employees’ permission.

The health of a business is intertwined with the health and well-being of its people – and their financial, mental and physical health, in turn, are all interconnected.

Employers that empower their people to navigate the challenges of paying bills and planning for the future will benefit from higher productivity and better workforce engagement. They are also showing care for their people at a time when many need it most.