Employee wellbeing.
Diversity, equity and inclusion.
Gender parity.
HR departments are having a rough time balancing company needs with those of their employees. Add to that work-life balance, regulatory compliance and managing employee expectation, and you’ve got a potent mix that’s ready to erupt.
It’s the economy
The global economic scenario isn’t helping much either. With inflation persisting above pre-pandemic levels, subdued growth and geopolitical tensions - economic worries are top of mind for most employees.
Couple that with rising rents and costs, and the recruitment consultancy Robert Half’s 2025 Salary Guide that shows the influx of expatriate professionals to the UAE is driving employee salaries down and you start to see the somber picture unfolding.
And not just for employees either. According to the report, while the current labor market may be buoyant for employers, it does not mean that those in the market have the right skills and employers are often compromising their needs due to budgetary constraints. With many companies intending to hire in early 2025, the market could become much more fluid; and that’s when talent retention becomes crucial.
Bird in hand
Retaining and nurturing existing employees is often more beneficial and cost-effective than hiring new ones. Research shows that the costs of turnover—advertising, recruiting, and training—can be substantial, often reaching thousands of dollars per position. This is just the start.
New hires generally take between one to two years to reach full productivity, whereas experienced employees already understand the organization's processes, culture, and clients.
Employers would also do well to remember that beyond cost, retention positively impacts organizational culture. Long-term employees often foster a sense of camaraderie, trust, and stability within teams, leading to a more cohesive and engaged workforce.
Experienced employees provide consistent customer service since they know client needs and company offerings, directly enhancing satisfaction, revenue, and reputation.
New pastures
But rising inflation has employees seriously considering a job change in search of higher salaries and better benefits. In the UAE, the Robert Half study revealed that two-thirds – 65% – will look for a new job before the end of 2025, with 30% of those citing the rising cost of living as a key driver for their move.
Worldwide too, surveys indicate that employees are increasingly seeking new jobs driven by stagnant salaries and lack of financial support in their current positions. Millennials and Gen Z workers are especially prone to switching jobs in search of better compensation and work-life balance.
Financial wellbeing
Employees’ financial worries are harming productivity. Recent CIPD research has found that in the UK over a quarter of employees say money worries affect their ability to do their job, rising to one in three admitting to a decline in productivity due to financial concerns.
Yet, financial wellbeing remains by far the most neglected area of an organization’s wellbeing activity according to the latest CIPD/ Simplyhealth Health and Wellbeing at Work survey. Fewer than half (44%) of HR professionals report that their organization promotes financial wellbeing to a large or moderate extent.
This is despite CIPD evidence showing how important financial wellbeing is to employee and organizational health.
A critical part of employee financial wellbeing is paying a wage that is equitable, fair and livable. But it’s equally important that this is bolstered with other targeted interventions like financial education and guidance that empowers employees to take control of their finances and make smarter money decisions.
Financial empowerment is a vital part of employee wellbeing—it alleviates financial stress, boosts confidence, and provides a stronger sense of security. When employees feel in control of their finances, they’re more engaged, productive, and resilient, creating a healthier workplace environment.
Strategic approach
The only thing worse than neglecting employee financial wellbeing is approaching this crucial aspect thoughtlessly and non-strategically. Organizations need to ensure that their offering considers all four dimensions of financial wellbeing in the workplace – rewards and benefits, in work progression, education and support.
Money conversations evokes feelings of stress, blame, insecurity, avoidance, and painful realizations. Organizations need to ensure that their financial wellbeing initiatives recognize and deal with this effectively.
The education component should provide knowledge and skills on a range of financial topics from saving, money management, debt, and budgeting, to helping employees understand their cognitive biases around money decisions. Topics like investing and retirement planning are also key discussion points.
The training should also link to broader themes outside the realm of finance alone, such as empathy, resilience and social justice. This enables employees to have a broad perspective of their finances and helps them to develop long term thinking.
Better way forward
As organizations strive to balance the evolving needs of their employees with the demands of a fluctuating economy, a strategic focus on financial wellbeing is paramount. Beyond offering fair compensation, companies must embrace a holistic approach that includes financial education, support, and resources tailored to their employees’ diverse needs.
By addressing financial stress, employers can enhance productivity, retention, and overall workplace wellbeing. In doing so, they not only nurture a more resilient and engaged workforce but also cultivate a positive organizational culture where employees feel valued and empowered. Prioritizing financial wellbeing is not just an investment in employees—it’s an investment in the long-term success and stability of the organization itself.
