Strategy & Operations » Leadership & Management » How to succeed in Economy 4.0: it starts with financial wellbeing

Employers across the globe strive for growth. Growth is typically delivered by an energised and engaged workforce. This is enabled by employees who believe in the purpose or mission of their employer and those who are personally ‘well’: mentally, emotionally, physically, and financially. It goes without saying, employers who can create this environment for their employees, are most likely to be winners in Economy 4.0.

In recent times, the role of the employer in helping to improve the ‘financial wellbeing’ of their employees, over and above pay, has made it onto the management agenda, often as part of broader mental wellbeing initiatives.

Historically, however, it has been difficult to quantify the impact of poor financial wellbeing and identify what actions would result in the greatest improvement. To address these issues, Salary Finance surveyed over 10,053 UK employees and 10,481 US employees, to support the development of a quantitative analytical model, which allows employers to identify the scale of the problem in their business and benchmark themselves against their peer group.

The findings were dramatic and similar across both markets;

  • A large percentage of employees have money worries (48% US, 40% UK)
  • They are more likely to have sleepless nights (8.1-times US, 8.8-times UK); more likely not to finish daily tasks (5.8-times US, 7.6-times UK); more likely to have troubled relationships with work colleagues (4.3-times US, 5.7-times UK); and more likely to be looking for a new job (2.1-times US, 2.3-times UK)
  • The cost of this in lost productive days and greater staff turnover equates to 11-14% US, 13-17% UK, of total salary cost for the employer – almost $500bn annually for corporate America as a whole and £50bn annually for UK Plc
  • Those who have money worries are more likely to suffer from poor mental health by an order of multiples. They are more likely to be depressed (4-times US, 4.9-times UK) and more likely be prone to panic attacks (3.4-times US, 3.8-times UK)
  • The highest levels of depression and anxiety among with the lowest earners, perhaps not surprisingly, but also with the highest earners (earning more than $160,000 per annum in the US, more than £100,000 in the UK).

One of the most commonly held beliefs is that financial wellbeing is simply a function of how much money you earn: pay more and financial wellbeing is improved. This turns out not to be the case.

In the UK, the two groups that have the highest rate of financial worries are those earning £10,000 – £14,999 pa (perhaps not surprising), but also those who earn more than £100,000 pa. The percentage stating that they had financial worries in both of these groups is 49% versus the national average of 40%.

More alarmingly, in the UK those earning more than £100,000 pa are more likely to suffer from panic attacks and depression than any other income group.

Astonishingly, 26% of US employees who earn more than $160,000 per annum also regularly run out of money before they get their pay cheque. The solution to financial wellbeing isn’t just pay rises. Our conclusion is that financial wellbeing is a consequence of employees’ financial habits in relation to how they spend, save and borrow.

This led us to develop the Financial Fitness Score. Based on the responses to ten behavioural questions, individuals receive a score from 1 to 5. Those with score 1 regularly run out of money before pay day, while those with score 5 are living a life in which their finances are no longer a constraint.

It is an indicator of current financial health and a lead indicator of future financial health. We found that 91% US, 82% UK of those scoring 1 worry about their finances, while only 12% US, 8% UK of those scoring 5 worry about finances.

The higher the Financial Fitness Score, the greater the financial wellbeing. Those who regularly borrow money to make up the difference between their spend and income (scoring 1-3) are more likely to suffer stress resulting in a number of symptoms: loss of sleep, distracted at work, job dissatisfaction, higher absenteeism, and are more likely to leave their job.

Interestingly, one would expect that the Financial Fitness Score would follow a normal distribution curve, as it does for salaries. This is not the case: there are two peaks, one at Financial Fitness Score 2 (34% of US employees, 31% of UK employees) and another at Financial Fitness Score 4 (38% of US employees, 41% of UK employees).

The other remarkable result is that the Financial Fitness Score distribution is very similar in the UK and the US. There appear to be two distinct populations; a population of natural ‘2s’ and a population of natural ‘4s’. ‘4s’ find it easier to save more and spend less, while ‘2s’ find it difficult to save more and spend less. Being a 2 or a 4 is not a function of income; in the UK, 40% of employees who earn more than £100k per annum are 2s (41% are 4s).

The Financial Fitness Score can help both employees and employers identify what can be done to help improve an individual’s financial fitness, and increase wellbeing as a result. Employers can tailor their benefits programme to meet the specific needs of their employee base.

Those who score 1 or 2 would benefit from weekly budgeting and tips to save a little extra, while those scoring 4 want help figuring out how to maximise their pension/retirement savings. Following this methodology, a business can establish its own Financial Fitness Score, which is the average score of its employees.

This can be set as a KPI for the business to benchmark against its peers, and determine what interventions are available to improve its employees’ Financial Fitness Scores. It can be used to measure the effectiveness of any programmes that an employer chooses to implement. More critically, an employer can now determine which financial wellbeing benefits will have the greatest impact on improving the mental health of their workforce, enabling them to quantify the benefits and ROI.

An employer can now improve the overall financial wellbeing of their employees, helping them improve their individual scores, which will increase the average Financial Fitness Score for the entire organisation. Those businesses with a higher-than average Financial Fitness Score will have fewer employees suffering stress due to financial worries and make them better placed to succeed in Economy 4.0.


Salary Finance surveyed 10,053  UK employees and 10,483 US employees to better understand the impact of poor financial wellbeing on them and their work performance. Their report ‘The Employer’s Guide to Financial Wellbeing‘ gives practical tips to employers as to how to develop a business case for their financial wellbeing strategy and how to choose which financial wellbeing benefits would be most suitable for their diverse workforce, based on this extensive market research. Click here to download your free copy.