Part three: Financial health plays a key role in employee engagement
Stress in the workplace is certainly nothing new. But what has evolved are conversations around the essential role employers can play to help relieve it. It demands immediate attention, as 61 per cent of employees in New Zealand reported feeling burnt out in 2024 — up from 53 per cent in 2022.
A huge part of mental and emotional wellbeing is the feeling of economic stability and security. Financial health can impact everything from an individual’s self-esteem to their ability to get a good night’s sleep. One survey found that 57 per cent of more than 500 New Zealand workers believed that higher costs of living had impacted their mental health negatively, with 46 per cent saying that financial stress is negatively affecting their physical health— and 34 per cent saying it impacted their productivity at work.
Here’s a closer look at financial health, and how it intersects with other elements of health to impact employee engagement, productivity and performance.
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Holistic health: The intersection of employee mental, physical and financial wellbeingExplore the interconnected aspects of employee health and how they affect the performance of individuals and organisations alike. |
What does financial health really mean?
Financial health or wellbeing is a person’s ability to smoothly manage financial obligations and have confidence in their financial future. It includes access to adequate financial resources to meet day-to-day needs, the capacity to absorb financial shocks, the feeling of being secure and in control of finances and being on track to achieve long-term financial goals.
Yet the financial wellbeing of workers in New Zealand is under significant strain. One survey revealed that over a three-month period, 32 per cent of New Zealanders considered financial stress and cost of living challenges as their main sources of stress.
The connection between financial and mental health
When financial health is lacking, it can also lead to mental health issues such as depression and anxiety. The TELUS Mental Health Index (MHI) found that financial and mental wellbeing are highly correlated — as financial wellbeing improves, so do mental health scores.
More specifically, the MHI discovered that the highest mental health and financial wellbeing scores of New Zealanders are enjoyed by the 8 per cent of workers who don’t have financial concerns. In contrast, the lowest mental health and financial wellbeing scores are found among the 17 per cent of workers who are concerned about being able to cover their basic needs.
The connection between financial and physical health
Financial stress is associated with high-risk behaviours and impaired decision-making. Worrying about money can negatively affect everyday decisions. And while some decisions made under stress have minor consequences, others may lead to poor physical health or injury.
All kinds of stress can manifest in physical ways — including financial stress. Body aches, exhaustion, insomnia and muscle tension, as well as more serious physical health conditions, are all linked to financial stress.
How financial health can affect employee engagement
A lack of financial health isn’t just a burden; it’s a distraction. Two-thirds of employees in New Zealand are worried about their financial security — and the state of the economy, inflation and job insecurity all weigh heavily on them. In fact, 83 per cent of employees are concerned about the economy. This is impacting their mental and physical health, and reducing productivity at work, with a disproportionate impact on Māori and people under age 40.
The resulting employee stress manifests in the workplace as increased absenteeism and presenteeism, both of which cost the economy many millions of dollars annually and affect the bottom line of most businesses. According to one whitepaper, the absenteeism of a typical employee costs an employer between NZ$600 and NZ$1,000 per employee annually. This adds up fast; the direct costs of absence across the economy rose from NZ$1.85 billion in 2020 to NZ$2.86 billion in 2023.
Facilitating improved financial health for the workforce
A survey of decision-makers found that almost half of New Zealand employers (48 per cent) are increasing salaries to help attract and retain the right talent. However, support for financial wellbeing goes beyond salary.
Employers should focus on helping employees reach their retirement goals. The 25 per cent of workers who know how much retirement savings they need to maintain their desired standard of living have the best mental health and financial wellbeing scores — well above national averages. And almost three in five (59 per cent) believe that their employer should offer a retirement savings option.
For employees, the feeling of being in control of their financial possibilities increases their satisfaction and participation levels, and every business should invest in happier employees. One study found that employees who score 9 or 10 on the happiness scale exhibit significantly better workplace performance. They’re also 2.4 times more likely to be in the top group for helping co-workers, 3.1 times more likely to be in that top group for helping the organisation and 3.4 times more likely to rank among the most innovative employees.
Take a holistic approach to employee health with TELUS Health
TELUS Health offers a suite of services that can help support the mental, physical and financial health of employees. TELUS Health EAP includes mental health support and access to financial assistance support. Available anytime, anywhere via the TELUS Health One app, employees have access to professional counselling, content library and self-guided digital programmes designed to help them navigate life’s challenges, transitions and milestones.
Learn more about the other factors and facets of holistic health, and how TELUS Health supports both employers and employees.