Research suggests that many employees feel like they’re not receiving enough support to improve their financial wellbeing. It could affect business operations, and cost you money too.
Financial wellbeing isn’t just about income. It covers things like financial literacy, confidence, and having a good relationship with money. As an employer, you can do several things to help your staff feel more in control of their finances and future.
1 in 5 employees say their employer isn’t doing enough to support their financial wellbeing
Amid concerns about rising inflation, 19% of employees feel like their employer isn’t doing enough to support their financial wellbeing, according to CIPD research.
The report found:
- 1 in 8 employees say their pay is not enough to support an acceptable living without having to go into debt to pay for essentials like food and utility bills.
- 27% said their pay is not enough to cope with a £300 emergency.
- Less than half (47%) said their pay is enough to help save for retirement.
Worries about money and long-term financial security can affect mental health, which can affect your business’s performance too.
An Aegon white paper suggests that poor financial wellbeing among employees is costing UK employers £6.2 billion a year. This represents the cost of absenteeism and presenteeism due to financial anxiety.
45% of employees said that financial worries cause them to feel anxious, which led to them taking time off work or being distracted when they’re in the workplace.
Creating a financial wellbeing programme for your business could mean your employees are happier and more confident, which could boost your operations. It can also make your business more attractive when hiring talent in a competitive market.
6 practical steps you can take to support financial wellbeing among your employees
Investing in a financial wellbeing policy is worthwhile.
The CIPD research found that 81% of employees whose employer has a financial wellbeing policy said it’s important to them that any future employer has one in place, so it’s a valued step.
In addition, these employees were far more likely to say their employer does enough to support their financial wellbeing and provides a good level of benefits.
If it’s something you’d like to put in place, here are six steps you could take.
1. Schedule regular reviews and create progression plans
While salary isn’t the only thing that supports financial wellbeing, the research shows that it’s important to employees.
Having regular employee reviews where salary may be discussed can help employees bring up worries they may have and show how they’re providing value to the company through their performance. While you may not be able to meet all salary expectations and goals, being able to have a conversation can be useful.
Making a clear progression plan, which could lead to a salary increase, can also motivate employees and mean they have more confidence about their future.
2. Take the time to explain your workplace pension
The research found that many employees are worried they’re not doing enough to save for retirement.
As most employees benefit from being auto-enrolled into a pension, taking the time to explain how it works, including what you’re contributing, tax relief, and how it’s invested, can be valuable.
Some of your employees may not realise how much is going into their pension or understand how it’ll add up over their working life.
3. Effectively and regularly communicate the benefits you offer
If you offer employee benefits, make sure you show these off and regularly talk about them. Whether it’s a salary sacrifice scheme that can make childcare more affordable or discounts for high street stores, it can be easy for employees to forget about these perks.
Effectively communicating what you offer can highlight how you’re supporting their wellbeing and mean employees are more likely to make use of them.
4. Consider how you could support long-term financial wellbeing
As budgets tighten, many people are worried about how they’d cope if they faced a financial shock. You may already have policies in place to support employees if something happens.
For example, do you offer an enhanced sick pay policy, paid bereavement leave, or group life insurance? Benefits such as these can support long-term security and mean employees feel less worried about uncertainties in the future.
5. Signpost where employees can turn if they’re worried
At difficult times, when struggling with debt or managing their household budget, for example, your employees may benefit from seeking support.
Signposting where trusted advice can be found can be useful and provide someone for them to talk to if they’re not comfortable discussing concerns at work. StepChange can offer advice about managing debt, and many other charities can help people who are struggling.
6. Work with a finance professional to support your employees
If you’d like help creating a financial wellbeing programme to support your employees or want a finance professional to help them understand how they can get the most out of their income and assets, we could help. Please contact us to discuss your needs.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.