Financial well-being: what it is and how to encourage it in your company

Financial well-being is a concept that should be present in everyone’s life — individuals and companies. After all, knowing how to deal with finances, having an organized budget , reducing the level of debt, defining and achieving financial goals are fundamental steps for quality of life — and the success of a business.

In addition to bringing personal satisfaction, financial well-being also reflects on other aspects in the lives of employees, including the company where they work. In this way, encouraging and promoting him within the company is an intelligent strategy.

Do you want to know what financial well-being is, how important it is and how to encourage it among employees? So keep reading this content and learn!

What is financial well-being?

Financial well-being is a term coined and settled by the Consumer Financial Protection Bureau (CFPB). It is an official United States body dedicated to the protection and regulation of consumer rights.

Therefore, it is also possible to find terms such as financial well-being and financial wellness. According to the agency, financial well-being can be defined as the situation in which a person is able to meet their financial obligations .

Still, she feels secure and calm about her future in relation to finances, in addition to being able to plan and use her resources to have a better quality of life. Soon, she doesn’t compromise her budget just with the obligations.

Therefore, it is necessary to understand financial well-being as a concept that is not just linked to having a good salary or large income. It is also associated with the condition of using these values ​​well and feeling fulfilled.

So a professional with a salary considered much higher compared to the earnings of the majority of the population does not necessarily have financial well-being. After all, he may be in debt, spending more than he earns and without financial planning.

In addition, financial well-being is also closely related to each person’s feelings about their finances. For example, if she is anxious or worried about the future of her financial life.

What is the importance of encouraging it in your company?

You already understood what financial well-being is, now you need to know the importance of this concept for your employees.

For this, it must be understood that the idea that employees’ personal problems and issues are not related to work is outdated. Currently, there is a whole legislation and studies about the need to work on these points.

In this sense, topics such as occupational and work-related illnesses, employee well-being in the company, quality of life and other issues have evolved over the years. Therefore, it is common to check ways to improve them within the company.

Programs and training, workplace gymnastics, promotion of leisure activities and sports are present in various corporate environments. Thus, financial well-being is also a subject that can be present in the professional scenario.

As you have seen, this concept has an important influence on people’s quality of life, tranquility and general well-being. Therefore, one benefit of encouraging this practice in the company concerns the employee’s own mental health.

This will have repercussions on the work environment. After all, an employee with a better quality of life will also feel more relaxed in their work. Collaborators in this situation are able to increase their productivity, reduce absenteeism and justified absences.

How does this concept relate to employee productivity?

According to researchers, there are practical and measurable results when promoting the financial well-being of a company’s employees. Employees who have a better quality of life and less worries are able to produce more.

First, because well-being is associated with a greater level of creativity to solve problems and carry out tasks related to employment. In addition, it can lead to better performance of the company itself.

In this scenario, employees are able to serve customers and suppliers better and build their loyalty more easily. With good quality of life there is also a decrease in the turnover rate, which is related to employee turnover.

With all these benefits, especially regarding employee productivity, the company can make more profit. After all, personnel costs are reduced, there is a better quality of life at work and revenues will be boosted by employees.

How to put this concept into practice?

You saw that there are many benefits to promoting the financial well-being of employees, especially in relation to productivity. But how can the company do this in practice?

Here, there are several points that can be worked on to a greater or lesser extent, depending on the needs and expectations of the companies. Therefore, the first step is to consider the sector in which it operates, the number of employees and its current situation.

It is worth noting that financial well-being is not only related to salary increases or bonuses. Although bonuses, prizes and other benefits are important attitudes, the company cannot limit itself to these points.

One possibility is to have a sector or team in the company dedicated exclusively to the task of getting to know employees. The idea is to talk to employees to understand their financial situation, always remembering not to be invasive.

You can, for example, put together questionnaires with questions about the subject. It is feasible to focus mainly on the relationship with money and feelings about the future. It is also possible to understand about the financial organization and desires of the collaborator.

From this, it becomes more feasible to create programs, provide courses or even talk more directly to help them. Another attitude that can make a difference is to set an example. Companies with good financial organization and planning can demonstrate the benefits of these practices.