May 30 2024
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Employer News

Navigating the employee experience in a cost-of-living crisis

How many Australians say financial worries have impacted their mental health?

A sharp rise in today's living costs means a staggering 50% of Australian super holders are struggling to realise their financial dreams1

It’s no secret that cost-of-living pressures have been significant for both individuals and businesses in Australia. It’s a reality that many Australian employers are coming to grips with, as they look to support their staff through today’s challenges. So, the big question is what’s causing this stress and what can be done to help fix it?

Financial stress in Australia

The term ‘financial wellness’ has been thrown around in different contexts to mean different things. To put it simply, financial wellness is when you can comfortably cover bills and everyday expenses and have enough money left over for savings and unexpected events. When you are not in a state of financial wellness, you may experience financial stress.

In 2023, the reality for many Australians is that the ability to tackle a major expense has declined by 39%2. In fact, the rate at which income did not cover living expenses increased by 38% and the ability to afford food basics or pay household bills worsened by 13%3.

Impacts that financial stress can have on the workplace

Many employers may not have made the connection between employees experiencing financial stress, and the impacts to their workplace. Yet, the consequences of poor financial stress on employees could have a severe impact on their work. Unlike the care that businesses have put on improving mental and physical health of their teams, financial literacy is a relatively new space that people leaders are now navigating. When an individual employee’s financial circumstance is stressful, it can affect not only the individual , but the morale of the team as a whole4.

It’s more than just a tight budget - it can take a toll on5:

  • Mental health
  • Physical health
  • Social relationships
  • Family relationships
  • Employment 

When employees grapple with financial struggles, it can affect their mental health as well as their ability to manage their finances with a clear mind, leading to feeling overwhelmed and a decrease in productivity - impacting not only their job performance but the morale of other employees6.

In fact, distraction from financial stress can lead to up to a 10% decrease in work performance, with 2.44 million Australian workers having contemplated leaving their jobs. On the reverse, employees who rate their employer’s commitment to financial wellness as good, were 63% more likely to stay loyal to a business7.

The result? A potential downward spiral of dwindling income or even job loss, perpetuating a cycle of financial strain and deteriorating mental health8.

How employers can help their employees get started with financial literacy  

Without good financial literacy - Australians may struggle to budget, save, and invest in their future, but when employers provide access to education and resources to boost employee financial literacy, research shows a reduction in their financial stress, along with becoming healthier and more productive9.

In fact, PwC’s Employee Financial Wellness Survey found that the percentage of employees who said they were highly stressed dropped from 52% to 19% after they completed a financial literacy program. Further, over half of all respondents (56%) said they were now in a “better position to manage their finances10.

Super funds are able to offer super education for members to help them better understand their super.

When it comes to super, lifestage is a critical factor for several reasons. That’s why to support our members through their working life and into retirement years, we’ve broken Rest’s financial literacy down into key moments that matter.

Learning more about superannuation can have a significant impact on financial futures. Rest is here to help with super education for members.

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If you are an employee experiencing severe financial hardship, ASIC’S MoneySmart website may provide helpful resources to assist. Additionally you may consider making a severe financial hardship claim through your super, however strict conditions apply. 

1 Instinct and reason, Rest Young Member Study, 16 October 2023

2 Kantar Australia, Kantar Finding Financial Freedom Series 2023, November 2023

3 Kantar Australia, Kantar Finding Financial Freedom Series 2023, November 2023

4 Greystone Consulting from Morgan Stanley Report, The Real Costs of Employee Financial Stress—and How Employers Can Help, 2021

5 Instinct and reason, Rest Young Member Study, 16 October 2023

6 Greystone Consulting from Morgan Stanley Report, The Real Costs of Employee Financial Stress—and How Employers Can Help, 2021

Employment Hero, Wellness at Work Report, 2022

8 TAL, Employee Financial Health and Literacy Whitepaper, 2023

9 TAL, Employee Financial Health and Literacy Whitepaper, 2023

10 PwC, Employee Financial Wellness Survey, 2016 


Issued by Retail Employees Superannuation Pty Ltd ABN 39 001 987 739, AFSL 240003 (Rest), trustee of Retail Employees Superannuation Trust ABN 62 653 671 394 (Fund). Any advice is general and does not take account of your objectives, financial situation or needs. Before acting on any advice or deciding to join or stay, consider its appropriateness and the PDS and TMD at rest.com.au/pds. The cost of providing financial services is included in the fees as disclosed in the relevant PDS. Rest and the Fund do not charge additional fees or pay or obtain commissions for advice provided. Rest employees are paid a salary and do not receive commissions or fees for the advice provided to you. They may receive a performance related bonus that takes into account the financial services provided. Super Investment Management Pty Limited, a wholly owned company of Rest, manages some of the Fund’s investments. Rest has no other relationships or associations with any related body corporate or product issuer that might reasonably be expected to influence Rest in providing financial services. For more information, contact us at rest.com.au/contact-us.