Since the mid-1900s, Gallup scientists, in several in-depth studies, have studied the common elements that best distinguish the lives of people that are thriving from those that are spent struggling or suffering. From this research five distinct statistical factors emerged. These are the core dimensions of wellbeing – or how people think about and experience their lives. These five elements are:
- Career Wellbeing: how people occupy their time and like what they do each day.
- Social Wellbeing: having strong relationships and love in their lives.
- Financial Wellbeing: effectively managing their economic life to reduce stress and increase security.
- Physical Wellbeing: having good health and enough energy to get things done on a daily basis.
- Community Wellbeing: the sense of engagement and involvement they have within the area where they live, or in their private lives.
Considering financial wellbeing, it is well documented that chronic stress affects health, but under extreme financial stress employee health can be even more radically impacted. Employees who are battling financially, or who are in debt, may forgo medical health cover, or will skip medical care and visiting a doctor because of financial concerns.
When workers worry about their financial wellbeing they lose focus and are less productive at work. Without proper management of their financial commitments they can suffer from physical and mental impairment, a lack of concentration and a drop in morale and commitment. By providing employees with financial education, you can help in protecting your most valuable assets.
Here are five typical signs of employees being under financial stress
- Employees taking loans from retirement savings
- Employees asking for salary advances
- Unexpected absences from work
- Employees spending time dealing with personal finances while at work
- Employees having medical issues that could have been avoided through preventive medical care
Teaching your employees how to manage their finances properly can make a much bigger impact than any other solution in helping them ease their stress. Education can help individual employees learn how to monitor and decrease their expenses, set budgets and create goals, and make smart financial decisions that put them back in control of their financial health.
- Consider adopting a schedule of financial counselling where employees can attend a quarterly session to learn financial skills that can help them better manage their money.
- Alternatively, consider providing free access to one-on-one financial counselling sessions or on-line education resources so that employees can learn on their own time.
In a South African context the World Bank’s data shows that South Africans are the biggest borrowers in the world, with 86% of the population in debt. The National Credit Regulator says 10.3 million South Africans are finding it difficult to meet their monthly debt repayments. Consumers’ financial health is an important factor in the wellbeing of any economy, and to achieve this in SA, the household debt-to-income ratio of 78.4 has to be reduced. One of the main obstacles to doing this lies in the fact that consumers with money trouble seldom realise the seriousness of their situation until they reach a crisis point.
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