EMPLOYEES’ financial wellness should be of concern to employers. Financial wellness can transform organisations and boost staff morale. Wellness is a buzzword in Jamaica, but is financial wellness discounted by the workforce and employers?

Bank of Jamaica’s inflation target range is four to six per cent, so employees and employers should also be aware of the impact of inflation on the purchasing power of money.

Let’s examine a scenario on the impact of inflation on the value of money. Applying the financial principle called the Rule of 72, if the inflation rate is projected at six per cent per annum, then your money is expected to lose half its value in 12 years (72 divided by 6). It’s important, therefore, for employees to understand how to invest their money to beat inflation in the future. Rule of 72 also calculates how long your money takes to double. Assuming that a fixed annual rate of interest on an investment is six per cent, it will take 12 years for your money to double; but with the impact of the annual inflation rate of six per cent, the real value of your money would be reduced by 50 per cent. This example shows that it will take more money to buy less in the future. Having an appreciation for financial literacy will assist in understanding why it’s important to invest in long-term instruments, such as stocks, which have proven to beat inflation with time.

According to research by PricewaterhouseCoopers (PwC), “one in three full-time employees” reported that concern about their finances has negatively impacted their productivity on the job. It further stated that 56 per cent of “financially stressed” employees spend up to three to four hours per week attending to personal financial issues while at work. The silver lining revealed that the majority of workers surveyed are not embarrassed to seek advice or help regarding their finances. Sixty-eight per cent reported that they utilised the financial wellness programmes offered by their employers, such as workshops, webinars, and coaching. Fifty-three per cent of employees said they are worried about inflation, and 44 per cent reported that inflation severely affected their financial well-being in 2022.

Fifty-nine per cent of full-time employees expressed that their salaries have not kept pace with the rising cost of living. Financial stress has proven to take a toll on their sleep, mental health, self-esteem, physical health, and relationships at home. Sixty per cent of full-time employees are stressed because of their financial situations. Interestingly, 60 per cent of the top six-figure income earners, earning US$100,000 and higher, have reportedly been stressed by their finances.

The PwC Employee Financial Survey polled more than 3,638 full-time US employees from a wide cross section of industries in that country.

The survey concluded that financial wellness “impacts productivity, retention, and engagement”. Financially stressed employees are more likely to leave their jobs for better opportunities. Employers should view the hiring and retention of employees as a long-term investment. Distracted workers are not engaged in the organisation, resulting in poor morale, low productivity, and attrition.

Forty-nine per cent of employees found it difficult to meet their monthly household expenses on time, and 28 per cent run out of money between pay cheques. Employees have placed more emphasis on short-term goals such as clearing credit card debts and saving for emergency needs, while retirement planning plays second fiddle. Forty-five per cent of employees have not saved enough for health-care needs. Again, as I have often said, investing long-term is important because health-care costs increase with age.

More women are financially stressed than men. Regarding ethnicity, blacks are ranked at the back of the pack in financial well-being. The report also identified 56 per cent of the workforce as caregivers. Eighty-nine per cent of employers provide caregiving support but only forty-one per cent are aware of the resources.

As the Jamaican society ages, more children will contend with balancing their careers with caregiving for family members. Are employers locally doing enough to assist workers in this regard? Last week I was invited as a financial presenter at an educational institution. A member of staff asked the question: “I am 62, is there any hope for me to plan for retirement?”. The answer is “There is hope.” Changes will be necessary. I arranged a confidential session with her. As the old adage goes, “Where there is a will, there is a way.”

Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her at gmclean@bpmfinancial. or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. Email her at livingaboveself@gmail.com