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A person's financial well-being is not linked to how much they earn each month. This was one of the conclusions of the study “The Employer's Guide to Financial Wellbeing 2018-19” (in free translation: The Employer's Guide to Financial Well-Being), carried out in the UK by the social impact company Salary Finance. More than 10,000 employees from 25 different economic activities took part.

The two groups of employees who showed the highest level of financial concern were those earning between 10,000 and 14,900 pounds a year and those earning over 100,000 pounds a year. In other words, the two ends of the survey: the lowest and the highest earners. And, contrary to what was previously thought, the second group, with high incomes, had higher rates of depression and panic attacks than any other. The conclusion for the researchers is that the cause of financial worry is not linked to a person's income, but to how they manage their money.

The survey also found that 40% employees are very worried about their finances. These professionals are almost eight times more likely not to complete their tasks and almost six times more likely to get into trouble with their colleagues.

The lack of financial well-being can also lead, as we have seen, to health problems. These employees are nine times more likely to suffer from insomnia, almost five times more likely to suffer from depression and almost four times more likely to develop panic attacks. We can therefore say that for every ten employees in the UK, four are more likely to develop health problems because of financial worries.

According to a survey carried out last year by insurance company Zurich, among the most common reasons British adults worry are those related to money. The most cited reason for financial worry, with 19% of the responses, was the fear that the salary will run out before the end of the month. Next, with 17% of responses, was the existence of debts. In third place, with 101 p.t.c. of responses, was the fear that the salary won't be enough to make ends meet in the long term.

There are other studies pointing out the financial difficulties that frighten the lower income group. These include: not being able to pay off credit cards, having to cut back on essential expenses such as food, increasing credit card and loan debts, fear of being sued for repossession, fear of being evicted for rent arrears and not having enough money to cover necessary expenses.

As mental and physical health conditions affect the day-to-day running of companies, employers can help their employees to identify and combat financial problems. Successful businesses will have fewer employees suffering from stress over their finances. Less stress tends to increase the level of engagement in daily activities, which leads to the desired scenario of greater productivity and better results for companies.

The study cited in the first paragraph of this article suggests the creation of the Financial Fitness Score, a grade or score that measures the degree of financial health of the employee. This index is based on ten behavioral questions. The answers lead to a score from one to five. The higher the score, the higher the degree of financial well-being.

Score one indicates that the employee is not in control of their finances, as the money runs out before the end of the month. The salary is not enough to cover expenses. As a result, the employee often resorts to expensive loans such as overdrafts and credit card revolving accounts.

A score of five shows that the employee has achieved financial freedom and can safely say that they are in a situation of financial well-being. Their finances are not a concern because, as well as having sufficient reserves to cover unexpected expenses, they can make medium- to long-term consumption plans.

The index therefore allows the employer to create the conditions for the company to have a policy of helping employees to empower each one of them to improve their financial well-being score. This logic is valid for any country in the world, including Brazil. Initiatives dedicated to making employees financially healthy are very welcome.

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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor