Wagestream launches Australian State of Financial Wellbeing Report

Reveals glaring disconnect between employers and employees

• 58% of employers believe they offer financial wellbeing tools, but only 36% of employees believe they receive them

• One in two employees would “think more favourably of my employer” and “be more likely to stay with my employer” if they were offered financial wellbeing tools

• Almost 30% of employees run short of money for food and regular expenses, under 50% can save regularly, and almost 40% struggle to meet bills and commitments from time to time

• Yet just 6% of employers plan to run a financial wellbeing program within next 12 months

SYDNEY, 16 November 2022: Financial wellbeing fintech Wagestream, as part of its Financial Inclusion Action Plan,has launched the inaugural Australian State of Employee Financial Wellbeing Report in a bid to identify how Aussie workers’ skyrocketing cost of living pressures can be eased.

The report is one of the largest pieces of research into employee financial wellbeing globally, undertaken during a time when cost of living pressures are increasing.

The research covered 1,004 employees and 496 human resources professionals encompassing a wide range of industries and business sizes across Australia, and was supplemented by Roy Morgan analysis of their single source data to measure the financial wellbeing of Australian employees.

It revealed a glaring disconnect between employees and HR professionals when it came to financial wellbeing tools at work.

Almost all HR professionals (84 percent) acknowledged that financial wellbeing is related to employee mental health, yet only 58 percent of HR professionals said their organisation offers any financial wellbeing tools and a smaller number of 33 percent have a financial wellbeing strategy in place.

This might explain why only 36 percent of employees believe their organisation offers financial wellbeing support.

Employees also expressed a high need and desire for financial wellbeing help from employers.

Almost 30 percent of employees run short of money for food and regular expenses, less than 50 percent are able to save regularly, and close to 40 percent struggle to meet bills and commitments from time to time.

One in two employees said they would “think more favourably of my employer” and almost one in two would even “be more likely to stay at my employer” if their employer offered financial wellbeing tools to assist with these issues.

Employees under 40 years old are more likely to say they want financial wellbeing support from their employer. Given the median age of an employee in Australia is around 37 years old, this is an important group to consider, especially in relation to future talent acquisition and retention.

But despite all of this, just 6 percent of HR professionals are currently considering the implementation of a financial wellbeing program within the next 12 months. This represents a huge missed opportunity according to Wagestream Australia CEO, Josh Vernon.

Wagestream Australia CEO Josh Vernon

 

Josh Vernon said: “Financial wellbeing occurs when an individual can meet their current commitments and needs comfortably, and has the financial resilience to maintain this in the future. If every employee in Australia was experiencing financial wellbeing right now, we would have a significantly happier and healthier, and far more engaged and productive labour force.

“Yet our State of Financial Wellbeing Report reveals that employers in Australia are not taking advantage of the huge opportunity to boost their employees’ financial wellbeing through a range of readily-available resources and tools. Despite a majority of HR professionals knowing employees need more help in this regard, the data shows that only a tiny minority are planning or able to roll out a financial wellbeing program in the next year.

“Employers who take the financial wellbeing of their staff seriously see great reward – roughly one in two employees would think more favourably of their employer or even stay with their employer if they offered financial wellbeing tools. The current tight employment market makes this even more critical given employers are competing heavily to attract, recruit, and retain high quality staff.”

Acting Head of Financial Inclusion Action Plans at Good Shepherd Australia New Zealand, Michael Joyce, said that it was concerning that women were disproportionately impacted by financial stress.

Michael Joyce said: “Despite women saving more regularly, they are less likely than men to be able to access $500 in an emergency. Cost of living pressures and financial stress are rising, meaning that people in Australia are finding it hard to manage their daily expenses and save for the future, particularly lower income earners.

“We believe that employers have a significant role to play in increasing the financial wellbeing of their people, and it is our hope that this major study will help employers identify ways they can work towards a safer and more inclusive community.”

Additional State of Financial Wellbeing Report findings:

Income:

• Lower income groups report the highest levels of financial stress and therefore may benefit most from employee financial wellbeing in the workplace.

• Those earning under $60,000 a year are the least likely to say they trust their employer.

Women:

• Women are less likely than men to have access to $500 in an emergency.

• Women also earn lower salaries on average but are still less likely (16 per cent) than men (22 per cent) to miss a bill payment.

• Women are also less likely to self-report that their employer offers financial wellbeing support compared to men (32% compared to 41%).

Age:

• Younger employees (18-24 years old) are more likely to be on lower incomes, have less in savings than older groups, and are more likely to miss bill payments.

• Employees under 40 years old are more likely to say they want financial wellbeing support from their employer. Given the median age of an employee in Australia is around 37 years old, this is an important group to consider, especially in relation to future talent acquisition and retention.

Employees overall:

• Eighty three percent of employees would be interested in a platform that enabled them to automate savings directly from their earnings.

• Seventy six percent of employees would like short and interactive courses where they could learn about managing money.

Employers overall:

• The main reasons employers would consider implementing a financial wellbeing program included “improving employee mental health” (62 percent) and “improving overall employee wellbeing” (55 percent).

• Fifty three percent of organisations also increased their focus on the financial wellbeing of their staff as a result of the pandemic.

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Enhancing Financial Wellbeing with Wagestream

Wagestream () is the financial wellbeing app founded by charities, designed for employees and built around pay and makes work more inclusive, fair and rewarding for one million people – by giving them access to fair financial services built around their pay.

Workers use Wagestream to choose their own pay cycle, manage their budgeting, save for a rainy day, chat to a personal money coach, and get fairer deals on financial products – all in one app, with no change to payroll.

Wagestream is driven by a social charter: every service it provides must measurably improve financial wellbeing. Over 70% of people using Wagestream feel more in control of their money, leading to a happier, healthier, more productive workforce.