There is plenty of buzz around employee wellbeing, with everything from fresh fruit and fitness challenges to mindfulness sessions and financial education being promoted as key to employee happiness. But, while any of these could lead to improvements in employees’ health and happiness, understanding the connection between physical, mental and financial wellbeing can help to achieve the best results.
A strong correlation between physical and mental wellbeing is well established. For example, according to The King’s Fund, around 30% of people with a long-term physical health condition will develop a mental health problem, most commonly depression or anxiety. Similarly, poor mental health conditions can also push up the risks associated with some physical health conditions. Research by the Mental Health Foundation, Let’s get physical 2013, published in 2013, found that depression has been linked to a 67% increase in the risk of death from heart disease and a 50% increased risk of death from cancer, while someone with schizophrenia can see their risk of death from respiratory disease increase threefold.
Financial wellbeing, meanwhile, can influence other aspects of an employee’s wellbeing. Offering a financial wellbeing programme can reduce financial anxiety among employees. This is a major contributor to employee stress, affecting productivity and potentially leading to sickness absence.
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The link between financial wellbeing and mental health has also been observed by mental health charity Mind. As well as finding that financial worries potentially lead to conditions such as stress, anxiety and depression, it also notes that poor mental health can make managing money harder.
Financial wellbeing can also affect physical health, especially where sleep is disturbed or an employee is forced to make poor diet choices due to money worries.
These knock-on effects are fairly common. Research conducted by Citizens Advice in 2012 found that more than half (54%) of people with debt worries said their physical health was affected, with nearly three in four (74%) people saying they were experiencing mental health problems. Poor financial wellbeing can also have serious ramifications for an employee’s long-term health.
In our white paper, Wellbeing: Examining the correlation between employee health and financial wellbeing, published in February 2017, we explored the correlation between employee health and financial wellbeing, with some alarming results. In particular, it found a strong correlation between low income and poor health. For example, Office for National Statistics’ figures from its bulletin Deaths registered in England and Wales 2015, published in July 2016, on avoidable deaths against gross disposable household income on a regional basis, show that, as earnings fall, avoidable death rates increase.
For example, in the North East, which had the lowest average gross disposable household income of £15,189 per annum, the avoidable death rate is the highest at 279.2 per 100,000 people. At the other end of the income scale are London and the South East with figures of £23,607 and 204.6 avoidable deaths and £20,434 and 190.1 respectively.
Offering employees a financial wellbeing programme can help them in a number of ways. As well as providing them with access to better-value products, to help them make their money go further or enhance their retirement savings, it can give them the financial education necessary to make more informed decisions around their finances. These decisions could affect not only their financial wellbeing but their physical and mental health too.
For example, it is common to talk about death-in-service benefits as multiples of salary. But, while an employee can do the maths to work out how much their family might receive, they may have little understanding of what this would mean if it had to be used to replace their income. Having this insight could mean they take out a higher multiple, giving them the reassurance their family’s future is safeguarded.
Given the connections between the different elements of employee wellbeing, it is important for employers to offer a broad range of products and initiatives within a programme. This will help to engage as many employees as possible, allowing them to enjoy the benefits that wellbeing brings.
Martin Parish is pension consulting lead and Mark Witte is principal at Aon Employee Benefits