How much do you think it would cost your business to replace just one of its employees?
The answer’s probably higher than you think: between 50-200% of their salary.
When you take into account the cumulative price of hiring, training, and managing disruption to the company’s productivity, retaining staff could be critical to success.
And the key to increase employee retention?
Employee satisfaction.
But how do you improve your workforce’s happiness – and, therefore, retention? One of the easiest, most effective, and low-cost ways is to introduce employee wellbeing benefits.
Yet, while many companies focus on perks like gym memberships or mental health support, they often overlook a factor growing in demand throughout the workforce: financial wellbeing.
Money worries are a leading cause of stress, affecting everything from focus to job satisfaction; employees feeling financially insecure are more likely to be disengaged, distracted, or even actively looking for a new job.
This is where financial wellbeing support comes in. Equipping employees with the knowledge, tools, and support needed to manage their finances and address financial difficulties, can help businesses to reduce stress, boost engagement, and (ultimately) improve retention.
The Hidden Cost of Employee Turnover
Research from The International Longevity Centre estimates an employee with an annual salary of £25,000 costs an average of £30,614 to replace¹ – while a senior staff member could cost anywhere between £40,000 to £100,000².
The average annual turnover for UK workers is 34%³ – meaning businesses are expected to replace a third of their staff every year. And if replacing an employee costs up to 200% of their salary each time, this isn’t just an inconvenience: it’s a potentially unsustainable financial drain.
How does employee turnover cost businesses money?
Recruitment expenses – Advertiser, recruiter fees, and interview costs.
Onboarding and training – Time and resources needed to support a new hire’s transition.
Temporary productivity loss – New employees can take months to reach full efficiency.
Severance or exit package costs – Some departures require added expenses.
But the financial impact doesn’t stop here: staff turnover disrupts other areas of the business, often in unexpected or unforeseen ways.
The ripple effect of turnover
Sure, the process of hiring and training a new employee costs time and money, but after each resignation, a role and its corresponding output sit stagnant – delaying projects and disrupting productivity. Departing employees may take valuable expertise, institutional knowledge, and client relationships with them too, which could take months (or even years) to rebuild.
Not only that, staff turnover can drastically impact team morale. Overburdened colleagues forced to work around or even take on some of the missing workload can end up feeling burnt out, uncertain, or underappreciated, possibly leading to even more resignations.
High turnover becomes a vicious cycle.
The Role of Financial Health in Employee Satisfaction and Loyalty
Before a business can address staff turnover and increase employee retention, they need to understand why their staff may leave.
Some of the most common reasons employees cite for leaving include:
Salary dissatisfaction.
Lack of financial security.
Feeling undervalued.
Stress (often over personal finances).
The common theme here? Financial concerns. And financially stressed employees are twice as likely to be job hunting⁴.
Many companies will assume salary increases are the only solution to retention, but there’s a low-cost, high-impact alternative: financial wellbeing programs.
Helping employees feel more secure and at ease with their finances can help reduce turnover costs, increase engagement, and boost long-term job satisfaction – all without salary hikes.
How financial wellbeing support enhances job satisfaction to increase employee retention
With 86% of employees feeling increasingly stressed about their finances, tackling financial wellbeing is key to improving staff wellbeing and retention.
Financial wellbeing programs equip staff with the skills to budget, save, and manage debt, empowering them to take control of their finances and address any financial difficulties they face. As a result, they feel less stressed and more confident, resulting in a more focused and productive workforce who are more committed to their roles.
Employees appreciate companies that invest in their financial education and wellbeing: it shows their employer values their long-term happiness and welfare as individuals – not just their work output. This helps build trust, loyalty, and a stronger emotional connection to their employer, helping staff to feel more valued and satisfied in their role.
In fact, 74% of employees say financial wellbeing benefits would make them more inclined to stay with their company⁵. Workers are far more likely to remain with an employer that helps them achieve financial security and secure future goals such as homeownership or retirement.
Financial wellbeing also enhances the value of existing benefits – providing a two-for-one perk. When employees fully understand support like pensions, salary sacrifice schemes, and savings plans, they are more likely to engage with them – making these benefits even more effective and increasing their perceived value.
Practical Steps to Integrate Financial Wellbeing into Your Retention Strategy
By prioritising financial health, businesses can create a happier, more loyal workforce while boosting retention and productivity.
But how do you implement these kinds of programs or skills in your workplace?
Assess employees’ needs.
Use focus groups or anonymous surveys to learn which financial concerns (eg, budgeting, debt management, or retirement planning) your employees struggle with most.
These insights can then help create a wellbeing program tailored to your workforce’s specific needs, ensuring its benefits provide as much value and assistance as possible.
Make financial wellbeing accessible and engaging.
Depending on your employees’ preferences, offer workshops, webinars, or on-demand resources to fit different learning styles and schedules.
Partner with financial experts or courses, such as Money First Aid, to provide credible, unbiased guidance.
Incorporate financial education into employee benefits
Bolster existing financial wellbeing benefits – such as pension offers, salary sacrifice schemes, or debt support programs – with extra guidance or education opportunities.
Provide simple fact sheets or one-off workshops and webinars that explain each of these benefits, to ensure employees fully understand and utilise them.
Create a culture of financial wellbeing
Encourage open conversations about money to remove any negative stigma.
Train managers or employees as Money First Aiders to offer ongoing peer support.
Measure your strategy’s impact and continuously adjust
By tracking success metrics such as engagement levels with these programs, employee feedback, and retention data, you can see which initiatives are having the most impact.
Expand initiatives that are working and adapt any that aren’t to improve your employees’ wellbeing even further.
Investing in financial health isn’t just a niche perk – it’s a powerful tool for improving employee retention, satisfaction, and overall wellbeing. By addressing financial stress, businesses can create a more engaged, productive, and loyal workforce while reducing expensive turnover; when employees feel financially secure and supported, they’re far more likely to stay and thrive – benefiting both them and the company in the long run.
To find out how Money First Aid training can benefit your company and help improve your employees’ financial education and wellbeing, get in touch today.
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