Beyond Salaries: Why you should care about Personal Finance in the Workplace

Our Interview with Val Leeming

“If businesses want to succeed in the new world, they must have top-notch human-centred systems to tap into the true potential of their employees (Norman, 2021).”

Paul Norman, the Group Human Resources Officer for MTN, suggests that the next era of HR will bring human centricity back to the centre. This is a thought that has been echoed by experts across the board, with Spar’s HR Group Executive, Thuli Tabudi, stressing how important authentic connection has been for Spar during the pandemic, and Forbes recently proposing that managers should become more like coaches for their employees (Tabudi, 2021; Miller, 2021).

That being said, how far should managers go to forge this connection? According to Valerie Leeming, managers should be going so far as to care about personal finance.

As the Director of Interface (a Financial Wellness firm that has consulted for companies like Deloitte, Microsoft, PWC and a number of South African banks) Leeming has been analysing the role of personal finance in the South African economy first-hand for almost 20 years. During our interview, she explained the connection between personal finance and the workplace.

Leeming:

“Everybody says that your employees are your greatest asset — and I certainly agree with that statement — but do we see our employees holistically? Or are we just looking at them in terms of what they are delivering? I think if we really want to care for the entire person, then we have to acknowledge the fact that people work in order to earn a living.

From a bottom-line perspective, when your employee is stressing financially about paying the bills or about how they’re going to pay their mortgage or whether their car is going to be repossessed — it’s going to impact their performance. It’s going to have an impact on the bottom line. Maybe not in month one, but if we quantify the amount of time that individuals spend stressing and worrying about their money — that is going to have an impact on an organisation’s productivity on the bottom line and on the profit.”

According to a 2019 study by the John Hancock Insurance group, “This loss of productivity combined with absenteeism from financial stress has a major impact on organisations, costing more than an estimated $1,900 per year, per employee, and totalling an estimated annual loss of $1 million for mid-sized employers and $19 million for large employers (John Hancock Retirement, 2019).” These figures, already very high — were taken from a strong economy before the pandemic devastated the market. South African financial stress statistics during the pandemic, although not quantified as of yet, are sure to be even more startling.

Besides productivity and the bottom-line, there are other effects of financial stress. According to a 2018 study by South Africa’s Omotola Olasehinde and Clinton Aigbavba, “anger, anxiety, depression, nervousness, irritability, aggressiveness, and boredom negatively affects employee performance, reduces in self-esteem, dissatisfaction of supervision, inability to focus, making decision problem and job dissatisfaction” (Olasehinde & Aigbavboa, 2018).

This link between mental health in the workplace and financial literacy is one closely explored by Leeming within her latest published work, found in Improving Mental Health in the Workplace (KR Publising, 2021). When asked about this, Leeming stated:

“It was really interesting to unpack how financial stress has an impact on mental health and well-being and how mental health and well-being has an impact on a person from a financial perspective. And very often, we don’t make that direct link. We are either not feeling mentally healthy and strong and resilient, or we’re feeling financial stress and pressure. And actually, the two are irrevocably linked.”

Leeming’s statement correlates with the results of Sanlam’s 2021 survey on financial stress. According to the survey, 54% of participants were unable to “make their money stretch until month end” and 57% of participants cited financial stress to have had the “most major impact on people’s mental well-being (Botha, 2021).” Financial stress surpassed both stress about loved ones’ health and stress brought on by the uncertainty of the pandemic.

So, if managers should care about the personal finance of their employees — how should they be approaching this? Should Jeff Bezos really be splitting his capital with his employees, as is the current controversy?

Leeming says no.

“Frighteningly, 70% of South Africans don’t have the financial skills that they need in order to make informed decisions. So, I would definitely say investing and financial education and empowering employees about how to manage their money effectively is a great starting point. It’s a case of ongoing topic talks that really are geared to improving financial health in the organisation. (You can also) use an outsourced approach through your employee assistance programme or through a financial wellness programme, where you can create that support without managers actually getting into the details of coaching staff who are financially distressed.”

Other methods of connecting to employees include, according to Leeming, being vocal about your organisation’s financial health and encouraging employees to talk about financial health as a concept.

“Try and talk about it in the workplace and encourage employees to reach out for help, and then I believe you’re going to have a much healthier organisation. The impact on the bottom line is going to be more profit, which would then have an impact on the employee earning more, hopefully into the future.”

Caring about financial literacy in the workplace may seem controversial, but it is an intrinsic step towards building a workplace that looks at the employee holistically.

After all, people do work to make a living.

If you’d like to read more about Val Leeming’s contribution to the Improving Mental Health in the Workplace book, you can order your own copy by using this link: https://kr.co.za/product/mental-health-in-the-workplace/

If you’d like to learn more about Interface and the work they do regarding Financial Wellness, you can do so here: https://www.interfaceinc.co.za/

References

Botha, F., 2021. The State of South Africans’ Mental Health. [Online] Available at: https://www.sanlam.co.za/mediacentre/media-category/expert-opinions/The%20State%20of%20South%20Africans%E2%80%99%20Mental%20Health [Accessed 11 November 2021].

JOHN HANCOCK RETIREMENT, 2019. Employer Financial Wellness Programs May Help with Stress and Retention. [Online] Available at: https://www.johnhancock.com/about-us/news/john-hancock-retirement/2019/10/worry-while-you-work–employees-worrying-at-least-once-a-week-about-personal-finances–finds-john-hancock-financial-stress-survey.html [Accessed 10 November 2021].

Miller, J., 2021. Why It’s Time To Reimagine The Employee-Manager Relationship. [Online] Available at: https://www.forbes.com/sites/forbeshumanresourcescouncil/2021/03/30/why-its-time-to-reimagine-the-employee-manager-relationship/?sh=4b1b6b8f4c9e [Accessed 10 November 2021].

Norman, P., 2021. HR the New Agenda. 1st ed. Pretoria: Knowledge Resources.

Olasehinde, O. & Aigbavboa, C., 2018. The Effects of Financial Stress of Employee in the Construction Industry. Johannesburg, University of Johannesburg.

Tabudi, T., 2021. Social Capital at Work [Interview] (https://www.youtube.com/watch?v=WlUqoetd-4M&t=19s Nov 2021).