Guide to measuring financial resilience

It's time to talk strategy. Building financial resilience for employees isn't just about good intentions; it requires a structured approach. To truly understand the impact of your efforts, you need to measure it effectively. Think of it as tracking key performance indicators (KPIs) for your workforce's financial wellbeing. You wouldn't manage your business without them, so why would you overlook measuring something so crucial to your employees' success and your company's performance?

This guide provides a clear framework for measuring the key components of financial resilience. By tracking these metrics, you can ensure that your initiatives are genuinely effective and delivering a strong return on investment.

Why is measurement important?

Measuring financial resilience might seem like extra work, but it's crucial for several reasons:

• Pinpoint problems: It helps businesses identify the specific financial challenges their employees are facing. Are they struggling with debt? Lacking a savings buffer? Or are they plagued by income volatility?  
  
  
• Target support: Once you know the specific issues, you can provide targeted interventions that will have the biggest impact. No more generic, one-size-fits-all solutions that miss the mark.  
  
  
• Prove the ROI: Measuring allows you to demonstrate the return on investment (ROI) of your financial wellbeing programs. This is vital for securing continued investment and buy-in from senior management.  
  
  
• Track progress: It enables you to monitor your progress over time and continuously refine your strategies for long-term success. What's working? What's not? Measurement provides the data to adapt and improve.  

The key components and how to measure them

Our latest report highlights six key components of financial resilience, each requiring its own measurement approach:

1. Savings buffer: This is your employees' safety net. Measure this by surveying employees about their savings levels. What percentage have less than $500? What percentage find saving unrealistic this year? Track changes over time as you implement savings initiatives.  
   
   
2. Debt position & management: High-cost debt is a major red flag. Track the number of employees taking up affordable loan options (if offered) versus those seeking help with debt management. You can also anonymously survey employees about their debt burden and sources of credit.  
   
   
3. Income stability: This is all about predictability. If you employ people with variable hours, track the percentage receiving 'Living Hours' (predictable hours and pay). Monitor employee feedback on scheduling practices and income volatility in surveys.  
   
   
4. Credit status: Access to affordable credit is key. If you offer workplace loans, track uptake and repayment rates. While you can't directly access employees' credit scores, you can monitor their use of alternative, inclusive financial products as an indicator.  
   
   
5. Social capital: This is about employees' support networks. Survey employees about who they turn to for financial help and advice. Identify any gaps in support, particularly for lower-income groups, to inform your initiatives.  
   
   
6. Financial stress: This is the overall pressure employees feel. Use regular, anonymous surveys to gauge employees' financial worries and their impact on work performance (e.g., ‘How often do you worry about money?’, ‘Has financial stress affected your productivity?’). Track changes in stress levels as you implement support measures.  

A continuous cycle

Measuring financial resilience isn't a one-off task. It's a continuous cycle of:

• Data collection: Gathering information through surveys, feedback forms, and anonymized data from financial wellbeing programs.
  
  
• Analysis: Interpreting the data to identify trends, challenges, and successes.
  
  
• Action: Using the insights to refine your financial wellbeing strategy and support.
  
  
• Review: Regularly evaluating the impact of your actions and making further adjustments.

By actively measuring and responding to your employees' financial resilience, you'll create a more supportive workplace, boost productivity, and ultimately, improve your bottom line.

See how your business measures up, with our workforce financial resilience calculator.