With financial wellbeing among Australian employees at a low of 20 per cent, there is a critical need for employer support to mitigate financial stress. But how can employers decide which measures will be most effective – and ensure they are actually used?

For a long time now, Australian employees have been grappling with significant levels of financial stress – and it’s starting to show up in the workplace.

According to Gartner’s latest Global Talent Monitor, just 20 per cent of employees in Australia say they have a solid sense of financial wellbeing, down from a peak of 30 per cent in 2022.

“It’s quite an alarming figure, but it’s also not really a surprise in the current context,” says Neal Woolrich, Director of HR Advisory in the Gartner HR practice. 

“There’s been fairly tepid wage growth over the past few years, and, at the same time, everyone’s facing huge cost-of-living pressures.”

Declining financial wellbeing isn’t just a personal issue – Gartner’s data suggests financial stress is putting both retention and engagement at risk. Amid increasing financial stress, employees’ intent to stay with their current employer has dropped to a three-year low of 33 per cent.

“As we see financial wellbeing go down, we tend to see intent to stay go down as well,” says Woolrich. “Employees often think the only way they can get a big pay rise is to change employers.”

The ‘switching premium’, or the pay rise an employee can expect when changing employers, currently stands at eight per cent, he says. This is the highest premium recorded since 2022. For employers, this is a warning sign that unless financial wellbeing is addressed internally, employees might be more tempted to walk away. 

“Discretionary effort has also been trending down for a few quarters now, reflecting all the [external and internal] concerns that are sapping the willingness of employees to work harder,” says Woolrich.

To retain and re-engage their people, employers need to recognise that standard compensation packages currently aren’t doing enough to protect most employees’ financial wellbeing. 

Demonstrating care and providing relevant, timely support will therefore be a source of competitive advantage in a difficult labour market.

Choosing the right financial wellbeing support for your people

The key to an effective financial wellbeing strategy is ensuring it’s aligned with the real struggles employees are facing, says Woolrich. 

While there are many tools employers can use – from financial education initiatives to emergency savings schemes – the real impact comes when support is designed and packaged around the specific financial pressures employees face during different stages of their lives.

“Employers tend to package it up as, ‘This is our mental wellbeing package. This is our physical wellbeing package. This is our financial wellbeing package,’” he says. “But instead, what we’ve seen work better is where they are targeted at the critical stages of life.”

For instance, employers might have packages of financial supports specifically designed for new parents, employees who are planning to buy their first home, those caring for elderly relatives or younger employees with lower financial literacy, he says.

Some examples include: 

1. First home buyer support package

• Housing stipends or homebuyer grants
• Low-interest home loans or access to credit unions
• Homeownership education sessions (e.g. understanding mortgages, strata, rates)
• Time off to attend property viewings or legal appointments
• Partner discounts with real estate agents, conveyancers, or mortgage brokers.

2. New parents and growing families package

• Paid parental leave top-ups
• Return-to-work transition support (e.g. reduced hours, flexibility)
• Onsite or subsidised childcare
• Parenting coaching or support groups
• Emergency nanny services or backup care options
• Baby bonus or newborn allowance.

3. Financial wellness and literacy package

• Access to a financial planner or coaching
• On-demand educational webinars (e.g. superannuation, budgeting, tax planning)
• Salary advance options or short-term emergency loans
• Matched savings schemes or financial incentives to build savings
• Tools for goal setting and debt management.

“If they want to go really deep to understand their employees, they can ask, ‘What do the different personas in our workforce look like? What do their stages of life look like? And is there any more specifically targeted support that we can provide across their journey with us?’” says Woolrich.

Packaging up support like this not only makes it simpler to access and use, but also ensures the support resonates with employees’ real-life challenges, making them more likely to appreciate and engage with it.

Download HRM’s template for creating an employee persona, or hear more about this in an episode of AHRI’s podcast featuring Lucy Adams, former HR Director at the BBC. 

Employers can also consider holistic measures to improve all employees’ overall sense of financial health. Tools like these are particularly valuable for smaller employers who lack the resources to offer comprehensive financial support programs. 

For instance, ensuring employees feel secure in their employment can go a long way; according to 2020 research by AMP, employees with a high sense of job security tend to report significantly less financial stress than those who feel their job is not secure.

Providing greater flexibility for employees is another option.

“There have been some studies that estimate that going into the office costs an average employee somewhere between $5000 and $10,000 per year in terms of commute costs and [things like] lunch, coffees and dry cleaning,” says Woolrich.

“Of course, we need to balance the organisation’s needs with the needs of teams and individuals, but flexibility needs to be part of that conversation.”

“When we last checked, about 85 per cent of employers were providing additional financial wellbeing support, but only about one in four employees were taking it up.” – Neal Woolrich, Director of HR Advisory, Gartner HR practice

Overcoming the utilisation gap

Despite widespread employer investment in financial wellbeing programs, uptake remains surprisingly low, says Woolrich.

“When we last checked, about 85 per cent of employers were providing additional financial wellbeing support, but only about one in four employees were taking it up. So there’s a real utilisation challenge there that employers need to overcome.”

Employers don’t necessarily need to expand their offerings, he says – they need to make what’s already there more visible, relevant and easy to use. 

While packaging support to align with specific life stages and needs will go a long way, employers may also need to address psychological barriers to accessing financial support.

“We [sometimes] see shame or embarrassment with emotional wellbeing, where employees don’t want their employer to find out they’re dealing with a mental health challenge. The same thing happens, but to a lesser extent, with financial wellbeing – they don’t want their employer to find out they’re struggling with their financial situation,” says Woolrich.

“What I’ve seen some organisations do really well [to address this] is getting video testimonials or blog posts from employees who’ve tapped into the support, and trying to bring to life that emotional response… That’s often really good for raising awareness that the benefit is available, but also how they’d use it in a specific situation.”

Another way to close the gap between available support and employee uptake is to ensure strategies are co-designed with the people they’re meant to help.

“Employee involvement is really critical to understanding, firstly, what they need, and secondly, what the barriers are to them participating,” says Woolrich. “We’re trying to create an effortless experience for employees.”

The programs that make the biggest difference, he says, are always those that meet employees where they are. When financial wellbeing support feels personal, timely and co-created, employees are far more likely to lean in.

Develop the skills to design targeted interventions and create a sustainable wellbeing strategy with AHRI’s Implementing Wellbeing Initiatives short course.