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4 ways to ensure your financial wellbeing support is effective in 2024

uploaded on 12 January 2024

With living standards expected to drop again this year, public sector organisations will need to renew their focus on financial wellbeing.

 

The Office for Budget Responsibility has warned that living standards will be 3.5% lower in 2024-25 than before the pandemic. In effect, this will mean the biggest drop in real living standards since the 1950s.

For employers in the public sector this means that supporting the financial wellbeing of staff well into 2025 will remain a top priority. Even before the Autumn Statement was announced at the end of last year, which made it clear that 2024 will be another financially challenging year for many employees, HR leaders across the public and private sectors told Edenred that the cost of living would have the biggest impact on employee performance this year.

Nearly two thirds of employers (64%) also said they were struggling to retain staff – reflecting a report in the Financial Times which said that the UK skills gap is most noticeable in the public sector. A similar number (62%) reported falling levels of employee engagement, while 39% were getting more requests for additional financial support and a third (33%) said their employees had taken up second jobs or side hustles.

While the majority of HR leaders (64%) believe their organisation had a duty to help employees with the cost of living, 54% said they had to compromise between the support they wanted to provide and their ability to afford it. 

Getting the balance right

More than ever this year, public sector employers will need to find effective means to boost employees’ overall financial position and support their wellbeing.

In direct response to the cost of living, the Government People Group has already brokered a deal with Edenred to provide Enhanced Discounts – a scheme that gives employees even greater savings on shopping and other purchases on top of their existing discounts.

Stuart Young, Senior HR Consultant for Government People Group, has said: “Providing Enhanced Discounts that offer more savings has been the biggest tactical winner from a financial wellbeing perspective. Departments now have the opportunity to invest in this scheme to help employees outside of pay budgets. It’s proved to be a massive trigger that has boosted engagement and provided a focus for benefits communications.”

Some government departments that have invested have seen orders and spend rise by 300-500%, with most employees now taking benefits up.

Some organisations, such as the Food Standards Agency, have also shifted from providing cash payments for reward and recognition to vouchers through Edenred. This allows for real-time recognition and the vouchers aren’t subsumed within monthly pay as a cash award would be. “It’s another small step we’ve taken to provide more help, but it all adds up and people appreciate that,” said Paul Moody, People Policy, and Reward Lead for the FSA.

This year, public sector HR teams will need to explore the full range of options available to retain, motivate and engage people and support them with their financial wellbeing. Talking to more of our public sector customers in recent months, they’ve told us that this will involve continuing to combine a long-term strategic approach with responsive tactical solutions that help to address emerging challenges and opportunities.

 

Here are 4 actions public sector people teams recommend
  1. Start by reviewing the support you have in place to drive financial wellbeing, engagement and performance. Does it reflect the current landscape or do you need to make changes?
  2. Similarly, review your reward and incentives offer. Does it provide financial reward for high performance that helps to engage and retain people, while also supporting them with their financial wellbeing? This is particularly revelant for oganisations such as the Food Standards Agency that are managing siginificant increases in workload.
  3. Ask employees whether current support is effective. What areas of financial wellbeing do they most need help with? Check your support covers all bases from discount schemes that enable employees to save money on everyday items through to Employee Assistance Programmes to help any employees in financial distress.
  4. Finally, make sure you prepare a communication schedule that will enable you to remind employees regularly throughout 2024 of the support available, how it will benefit them and how to access it.

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