Right now, a dedicated case worker who’s spent years supporting vulnerable people is quietly updating their résumé – not because they’ve lost their passion, but because rising living costs are making it harder to make ends meet.

It’s a familiar story across the NFP sector, where 1.6 million employees are feeling the squeeze of rising living costs, and many organisations are unable to ease the pressure through pay rises alone.

Funding agreements, donor expectations and the need to direct limited resources towards their mission all leave NFPs with little flexibility to increase salaries. While many employees willingly accept a lower salary in exchange for meaningful work, the cost-of-living crisis is making that trade-off harder to sustain for some employees.

But pay isn’t the only lever employers have to financially support employees. There are many other things NFP employers can do for employees when pay rises aren’t possible.

So, what does good financial wellbeing support look like when employers can’t provide a salary increase? We spoke to Helena Jakupovic, General Manager of the WA-based Financial Wellbeing Collective – a collaboration of 12 partner NFPs united to reduce the drivers and impacts of financial vulnerability in the Western Australian community – to find out.

What is financial wellbeing and why is it important in the workplace?

According to Jakupovic, financial wellbeing isn’t just about how much someone earns – it’s also about the emotional and psychological impact of their financial situation.

“Financial wellbeing is about having some money left over after covering your expenses, while also feeling financially secure both now and in the future,” she says.

“Some indicators of good financial wellbeing include having the capacity to absorb a financial shock, feeling in control over day-to-day and month-to-month finances, and having the financial freedom to make choices allowing you to enjoy life.”

How the cost-of-living crisis is affecting employee financial wellbeing

Jakupovic says financial wellbeing affects every part of a person’s life, including their mental and physical health, social life and work. She describes it as a right, not a privilege, and says it’s something every employer should take seriously.

“Financial stress is a direct productivity risk,” she says. “Employees under financial strain experience cognitive overload, which reduces their mental capacity for tasks and problem solving.”

According to AMP’s 2024 Financial Wellness Report, financially stressed employees lose an average of 6.9 hours of productive work each week through absenteeism and disengagement.

The report also found that financial stress is widespread in Australia, with 42% of respondents experiencing mild financial stress, 15% moderate and 8% severe. In the workplace, that stress can manifest as distraction, anxiety, fatigue and poorer mental wellbeing.

Last year, the Gartner Global Talent Monitor  survey found that four in five Australian employees did not feel financially secure – with cost-of-living pressures cited as a key reason.

Jakupovic says the findings reflect what her organisation sees every day.

“We find many workers continue to ‘cope’ long after financial strain has begun to affect wellbeing, sustainability and confidence, particularly when pressures creep rather than arrive all at once,” she says.

“Cost-of-living stress interacts with workload, burnout, compassion fatigue and staff retention. Addressing it is not only a wellbeing issue – it is essential workplace and community infrastructure.”

Importantly, financial pressure tends to build over time, which means employers have a chance to identify and address issues before they begin to impact employee wellbeing and performance.

Here are five practical ways NFP employers can help ease financial strain and better support their employees.

1. Explain salary packaging better and more often

Many NFP employees have heard of salary packaging, but for some it’s still a hazy idea wrapped up in complex tax rules. As a result, it can be dismissed as too hard or not worth the effort.

While hard data isn’t available, one salary packaging provider said the employee participation rate is lower than it should be in the NFP sector:

“Not for profit organisations… usually will have [only] about 60 to 70% of their staff actively participating. [If] you understand the benefits you’re like, why isn’t everybody doing this? It can be a huge benefit”.

When you take the up to $15,900 tax-free benefit into account, the gap between what an NFP employee earns and what they might earn in a similar corporate or government role can narrow significantly.

Often, the challenge for leaders is overcoming ‘the curse of knowledge’ – the assumption that what seems obvious to you is obvious to your team.

That means not assuming staff understand how salary packaging works or the value it can provide. Rather than treating it as a one-off benefit mentioned during onboarding, reinforce it throughout the year with regular reminders, plain-English explanations and opportunities for employees to ask questions.

Most salary packaging providers can help explain the available options, answer questions about eligibility and help them understand how salary packaging could benefit their individual circumstances, so make sure all employees have the contact details accessible for when they have questions.

“Financial literacy is low in Australia, which is why simply offering these benefits is not enough,” Jakupovic says. “The biggest issue – and opportunity – is to create environments that encourage employees to reach out for support and not try to struggle through financial pressures in isolation, shame, embarrassment or guilt.”

2. Support and reinforce financial literacy

Financial wellbeing initiatives are most effective when they are paired with practical financial education, says Jakupovic.

“We are not taught financial literacy in school, so often our money habits and mindsets are influenced by what we see, hear, feel and experience in the family home,” she says.

In many cases, employees don’t necessarily lack financial literacy altogether. Rather, they have a patchy understanding of the elements that comprise personal finance. For example, someone could be confident with budgeting, credit and debt, but less familiar with tax, interest rates or superannuation.

“NFP leaders should offer opportunities for employees to improve their financial knowledge,” Jakupovic says. “They could host financial literacy workshops to increase knowledge and awareness, or provide pathways to complimentary services like financial counselling.”

She adds that creativity is often an employer’s best friend in this area, and that decision-makers should engage other providers or organisations with a particular area of expertise to “see what they can offer in the financial wellbeing space”.

For example, you could bring in a superannuation expert to explain retirement planning in plain language, or invite an accountant to run workshops on budget management and goal setting.

Sessions like these can help employees build financial confidence while encouraging them to seek support before financial pressures become overwhelming.

3. Offer financial coaching

According to Jakupovic, financial education is only part of the picture. Employers could also consider offering financial coaching to help employees put what they’ve learned into practice in ways that reflect their circumstances.

“Financial coaching is an early intervention, offering a safe and empowering framework for exploring how financial wellbeing influences an individual’s overall sense of wellbeing.”

Rather than focusing solely on budgets or investments, financial coaches help people understand the behaviours and beliefs that influence their financial decisions. Those patterns are often shaped by experiences and assumptions formed over a lifetime, including during childhood.

For example, someone who repeatedly hears that “debt is dangerous” while growing up may carry that belief into adulthood, shaping how they approach a credit card or a loan for a car or home.

Coaching can help people examine and, where necessary, change their mindset, says Jakupovic. While it won’t alter their financial circumstances, it can help them break unhelpful habits and beliefs, giving them greater confidence and a stronger sense of control over their finances.

There are several ways employers can make financial coaching accessible. Larger organisations may choose to partner with a financial wellbeing provider to deliver one-on-one coaching or group sessions, while smaller NFPs could negotiate discounted rates with an independent coach.

A quick Google search can help find some of the many financial coaches working across the country.

4. Offer genuinely flexible working arrangements

Flexible working arrangements are often associated with work-life balance, but they can also help ease financial pressure. After all, financial wellbeing isn’t just about what people earn – it’s also about what they spend.

When employers offer genuine flexibility – whether that’s working from home, flexible hours or compressed work weeks – employees save on a range of day-to-day expenses.

For instance, if a parent can take time out to drop off and pick up their kids from school, a family might save on outside-school-hours care. Then there are the commuting savings an employee can make if they aren’t required to come into the office every day of the week.

But Jakupovic says offering flexible work arrangements is only part of the solution. Employers also need to make time to understand their employees’ circumstances and ensure they know what flexibility is available.

“Ask if your staff members have taken advantage of the employee offers and supports that are available,” she says. “Ask them if they understand how they work and how they could benefit from them.”

Regular one-on-one meetings, onboarding discussions and performance reviews are good opportunities to have these conversations and explore which working arrangements could help ease the financial pressure a team member is experiencing.

After all, the right solution will vary from person to person. One employee might benefit from flexible start and finish times to avoid peak-hour travel while another might value compressed work weeks or greater flexibility around caring responsibilities.

By working with employees to find arrangements that suit their needs, you can make flexibility a practical tool for improving your team’s financial wellbeing.

5. Incentivise and encourage walking and cycling to work

With petrol prices elevated, the cost of getting to and from the office or work sites is near an all-time high. Which means walking or cycling to work – for those who are able – could save employees a significant amount of money.

Evidence also shows that middle-aged (35-54) commuters who walk or cycle – known as active travel – have better self‐reported work performance than both public transport and car commuters. This result may reflect the health and cognitive benefits of active travel.

Beyond the strategies recommended by Jakupovic, NFP employers may also want to consider how they can incentivise and encourage walking and cycling to work. The WA government’s Your Move site has a variety of suggestions for ways employers can do this, including:

• Build a supportive culture – Regular riders are your best resources and can offer advice about facilities and managing work clothes, ride with novices through a ‘bicycle buddies’ scheme, assist with journey planning and answer questions about riding safely in traffic;
• Management endorsement – Employees need to know that their decision to cycle to work will be supported and that there is no stigma attached to riding. Management can show support by having a flexible approach to working hours and by getting involved with ride to work events;
• Provide information on active travel – Making information available on riding to your organisation can help employees and visitors consider this option and plan their trips. Information could be provided for new and existing staff including building access guides and local maps which show cycling routes; and
• Offer incentives – An incentive can nudge those thinking about it to give it a go. Incentives can include a bike breakfast, an ‘earn-a-bike’ initiative, or a scheme that provides frequent riders with rewards based on either trips or distance cycled.

Supporting financial wellbeing is about understanding people

Jakupovic says that while a small number of employers still underestimate the impact of poor financial wellbeing on their workforce, most recognise it’s a genuine issue. The real challenge is finding support that reflects each employee’s individual circumstances.

“The solution depends on the employee, the work they are doing and what is important to them,” she says. “Deep and genuine connection is the most powerful support. Ask people how they are doing. Follow through and follow up. Do little things that make them feel seen and valued.”

Once you understand an employee’s particular motivations, worries and preferences, you can tailor your support accordingly.

That might mean a manager recommending financial coaching to someone who lacks confidence managing money, helping another employee maximise their salary packaging benefits, or offering greater flexibility to reduce commuting or childcare costs. The most effective support is the support that responds to an individual’s circumstances.

“Have regular conversations about cost-of-living pressures and how employees are coping,” Jakupovic says. “Ask what would be beneficial and see if it can be incorporated into your offers.” By regularly checking in, organisations can ensure their support remains relevant, practical and genuinely valued, rather than becoming a box-ticking exercise.

–

Not-For-Profit People is an initiative of EthicalJobs.com.au — Australia’s top job-search site for the not-for-profit sector and beyond. 10,000 Australian charities, not-for-profits and social enterprises use EthicalJobs.com.au to find dedicated and passionate staff and volunteers to help them work for a better world. Find out more at EthicalJobs.com.au/advertise