Money talks. And Salary Finance is reshaping the conversation. It’s helping the nation understand its own wallet by coining the term “financial fitness” and giving it some currency.
Salary Finance is on a mission. The team have surveyed thousands of British workers, and discovered something concerning: we’re all worried about our personal finances.
The survey revealed just how urgent proper financial management is. Their nationwide study of over 10,000 workers across 25 sectors found that as many as 4 in 10 of us experience ongoing financial worries, which leads to higher rates of stress, anxiety and sleeplessness, more days of work missed and much lower productivity (see infographic below).
All this can have astonishing effects: financial stress costs British businesses 5-7 workweeks of lost productivity and costs as much as 17% of their total employee salary bill in lost productivity and additional recruitment .
The survey also found a high level of financial illiteracy, with terms like ‘ISA’ and ‘income protection’ and information about pensions proving opaque to most Brits. Having ‘no money to plan’ and ‘no one to trust’ were given as reasons for struggling to understand these financial issues.
But the double Lloyds Bank National Business Award finalist Salary Finance has found a solution to this societal problem.
Introducing financial fitness
Salary Finance has used its expertise to help us understand what’s keeping us up at night, and what changes to our saving, spending and borrowing habits we can call make in order to sleep easier at night.
With Salary Finance’s new Financial Fitness Score, there’s now an easy way to keep financially fit and get on top of one’s personal finances.
Salary Finance used the data from their survey to generate and calibrate the model behind their Financial Fitness Score, a measurable key performance indicator (KPI) based on a series of questions about our spending, saving and borrowing habits. They hope this scoring will help British workers better understand their financial state and what they can do to improve it.
The test is remarkably straightforward. By asking just ten questions on how much money you’ve saved, whether you can afford to make long-term spending plans, how far your salary goes and – most importantly – how you feel about your financial position, Salary Finance builds up a fairly comprehensive picture of your financial security and the effect it has on your wellbeing.
You’re then awarded a simple score between 1 (‘Not in Control’) and 5 (‘Financial Freedom’), which represents your level of financial fitness. There’s no jargon involved, so the system makes it easy to understand the link between your financial state and your wellbeing. More specifically, Salary Finance found that 82% of those scoring 1 had money worries, whereas only 8% of those scoring 5 felt the same.
Based on this score, and the specific answers given, Salary Finance can offer an individual financial education, guidance and tips for saving money as well as borrowing responsibly that’s tailored to their very specific financial needs.
So employers can help too?
In order to find the most effective solutions to financial fitness, Salary Finance needed to partner with employers too. Since better financial wellbeing results in improved productivity, employers have a lot to gain from the guidance provided by the Financial Fitness Score.
That’s why they produced The Employer’s Guide to Financial Wellbeing, designed to get employers thinking about the scale and cost of poor financial wellbeing within their organisation. It encourages them to use the Financial Fitness Score to give them a clear picture of their employees’ financial concerns and anxieties, and learn what they can do to alleviate their employees’ money worries.
Employers can be a vital part of improving financial fitness, and it’s clear that British workers trust their bosses to help. Across all sectors, 77% ‘trust their employer to keep their personal financial situation private from their colleagues and manager’, while nearly 50% ‘would value a low-cost loan from their employer.’
Salary Finance has made The Employer’s Guide to Financial Wellbeing free for all employers to use - you can download your free copy here.
Tackling financial stress where it really counts
With NHS workers actually topping the list of UK workers applying for payday loans this year, nowhere is financial stress felt more strongly than in NHS Trusts across the nation.
Using insights gathered from its UK-wide survey, Salary Finance found that as many as 39% of NHS employees suffer from financial worries. This results in sleeplessness, panic attacks, severe rates of stress and a depressed mood; among NHS workers an astonishing 50% report a high level of stress caused by financial worries, while 27% of doctors and nurses claim to have suffered from sleeplessness. Worryingly, around 53% of NHS staff scored 3 or below on the Financial Fitness Score, indicating significant financial insecurity.
The Financial Fitness Score gives NHS staff the means and the direction to better manage their finance and helps them seek out advice and assistance for changing their spending, saving and borrowing habits. This can help NHS employees become less reliant on high-interest borrowing, such as payday loans.
Financial stress has implications for patients, too. There is widespread evidence that when NHS employees are free from money worries, they become more engaged and able to produce better outcomes for patients – the financial fitness of NHS staff matters to us all.
Improving the financial fitness of the nation’s workforce
Asesh Sarkar, CEO and co-founder of Salary Finance, said: “This research shows that personal money worries are having a real impact on employee wellbeing and performance, as well as on productivity. However, it also indicates that higher levels of financial literacy and access to responsible finance have the potential to improve the situation.
“In this groundbreaking study we have developed a Financial Fitness Score, which is a quantifiable objective measure, and can act as a KPI. Organisation leaders and HR professionals can use this to benchmark how they are performing versus their peer group. More importantly, this study identifies what employers can do to improve their fitness score KPI and reduce the cost of ‘financial unfitness’ within their organisation.
“NHS employers are in a unique position to provide support on both fronts, through financial education, salary-deducted savings and loans, to help employees increase their financial fitness and ultimately get their finances in shape. This leads to a healthier and more productive workforce.”
Salary Finance is an accredited provider to the NHS and has a proven track record working with NHS Trusts across the UK. But they want to go further, helping many more workers across all sectors improve their financial fitness.
The team behind Salary Finance hopes that the Financial Fitness Score will both demystify and quantify the concept of employee financial wellbeing, help break down the stigma around talking about personal finances in the workplace and ultimately make financial advice and guidance much more accessible for workers across the nation – and it’s exactly this that makes them such a worthy candidate for the 2018 Lloyds Bank Positive Social Impact of the Year Award!
To learn more about Salary Finance, visit www.salaryfinance.com or check out the company’s YouTube Channel for the first-hand testimonials showcasing its positive impact on UK society and its workforce.