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Employers who prioritise financial wellness have better talent outcomes.
Against a backdrop of inflationary pressures and rising living costs, workers around the globe are increasingly focused on finances.
Just over half (52%) of workers globally say meeting their immediate financial needs and covering the cost of food, housing, and utility bills is causing them stress. To underscore how concerned workers are feeling, nearly a quarter (23%) are not confident that they’ll be able to maintain their current lifestyle.
Additionally, longer term financial goals are also causing stress for a similar number of workers (54%), with roughly a third saying they are not confident that they can save enough to be financially comfortable in retirement.
Whether it’s more immediate or in the future, financial wellness is a pressing concern across the world.
What is financial wellness and how are most workers defining the concept?
We previously explored financial wellness around the globe a few years ago, where we learned many workers are more focused on spending on more immediate needs than planning for the long-term, a trend that continues today.
In our latest research, designed to get a better understanding of the needs of employees in the current climate, we found that employees continue to evolve what financial wellness means and selected the following as the most popular factors in how they define what it means to be 'financially well':
- Having money set aside for an emergency
- Feeling secure about their financial situation
- Saving enough to retire according to retirement savings guidelines
Based on what they've selected, workers are focused on a mixture of subjective and objective factors to define 'financial wellness'.
How do employers define and prioritise the financial wellness of their employees?
When we asked employers a similar question about defining financial wellness and how they were prioritising it at their workplace, there were some mismatches.
Chart 1: How do global workers and global employers define financial wellness?
|Most selected attributes of financial wellness||Global Employees
|Having money set aside for an emergency||60% ↑||42%|
|Feeling secure about your financial situation||57%||54%|
|Saving enough to retire according to retirement savings guidelines||46%||40%|
|Having enough to pay for health care||43% ↓||51%|
|Having the means to save for a purchase (e.g., buying a house or a car)||41%||44%|
|Spending within your means||40% ↑||28%|
|Having minimal debt||38%||30%|
|Having the means to support loved ones outside the household||31%||34%|
|Having the ‘know-how’ to make financial decisions||30%||39%|
|Having the means to pay for education||26% ↓||41%|
|Having the means to support causes you care about||23% ↓||34%|
Source: The Fidelity Global Employer Survey 2022 & The Fidelity Global Sentiment Survey 2022. ↓↑ = Significant areas of mismatch with lower or higher percentage selected by employees compared to employers.
While regarded as important by employees, financial wellness of employees isn’t a priority or even considered a responsibility by employers.
How does financial wellness impact employer outcomes?
Discussing financial wellness of employees may not seem like a normal topic that would fit into the work day of most firms, but we identified employers who prioritise financial wellness, and those who have a broader definition of what financial wellness is, have better talent outcomes. Additionally, financial wellness is a key indicator of employee satisfaction.
Employers with this broader view, specifically those that consider seven or more elements of financial wellness, had attraction rates of 69% – much higher than for those companies who only considered two or fewer elements of financial wellness and whose attraction rates were 56%.
Yet, the mismatch in the employee/employer definition, coupled with the lower ranking of financial wellness as a priority for employers, highlights a missing connection between employee well-being needs and employer responsibility for many companies, especially when there is a positive relationship on talent attraction, recruitment, and retention.
What actions could employers consider to strengthen financial wellness for their employees?
While the individual needs of your employees may differ, there are a few actions all employers could consider when looking to broaden the range of support to strengthen the collective financial wellness of all employees.
- Shift or deepen the mindset that employers can play a role in strengthening the financial wellness of their employees. Work with your communications and/or marketing teams to promote the messaging for this mindset that is both globally consistent and locally relevant for your firm’s locations.
- Look for additional opportunities to integrate financial wellness into other parts of the workplace culture by broadening the definition of financial wellness and offering employee benefits that reinforce that shift in workplace culture.
- Begin or supplement financial education for all employees in all stages of their career. We found that one in five (20%) would like support on retirement planning. While 17% would like financial education and 14% would like education around investing from their employers.
Strengthening employee financial wellness is a large-scale and complex challenge for employers – especially for those with an international footprint. However, integrating financial wellness deeper into workplace culture may result in improved outcomes in areas like talent attraction, recruitment, retention, engagement, and productivity. With those kinds of potential outcomes, employers who actively seek to strengthen the financial health of their employees may experience the strengthening of their own financial wellness.
The data collection, research, and analysis for the above markets regarding global employees was completed in partnership with Opinium, a strategic insight agency. Data collection took place between August 2022 and September 2022. The sample consisted of 20,000 respondents with the following qualifying conditions: Aged 20-75; Either they or their partner were employed full-time or part-time; A minimum household income of: Australia: A$45,000 annually; China: RMB 5,000 monthly; Hong Kong: HK$15,000 monthly; USA: US$20,000 annually; Canada: CA$30,000 annually; UK: £10,000 annually; Mexico: $4,500 MXN monthly; Ireland: €20,000 annually; Germany: €20,000 annually; Netherlands: €20,000 annually; France: €20,000 annually; Italy: €15,000 annually; Spain: €15,000 annually; Japan: 3m yen annually; Brazil: R$1,501 monthly; India: 55,001 annually; Singapore: SGD$2,000 monthly.
The data collection, research, and analysis for the above markets regarding multinational firms, also known as global employers, was completed in partnership with Dynata, a third-party market research company, using their global research panel in conjunction with their partner vendors. Data collection took place between 14 December 2021 to 12 January 2022.
This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision, nor should it be treated as a recommendation for any investment or action. Fidelity refers to one or both of Fidelity International and Fidelity Investments. Fidelity International and Fidelity Investments are separate companies that operate in different jurisdictions through their subsidiaries and affiliates. All trademarks are the property of their respective owners.