Financial wellbeing: Five ways you can help your people in 2022
In the wake of the pandemic, and with a new cost of living crisis looming, employers need to do more to ensure their benefits strategy helps employees with their financial affairs.
The cost of living crisis caused by rising taxes and soaring energy costs is adding to financial burdens that are troubling employees in the UK. And it’s not just the lower earners that are concerned – the most recent Financial Wellbeing Index from Aegon found that 55% of average earners and a third of top earners also worry about money.
It should therefore come as no surprise that many people are currently unable to leave their financial troubles behind when they go to work, affecting them both physically and mentally and their overall performance.
Over the years, this kind of sentiment has already led to an increasing recognition among employers of the importance of employee financial wellbeing. However, there is strong evidence to suggest that is not yet an area that they have addressed particularly well. According to the CIPD Health and Wellbeing at Work Survey 2021: “Financial wellbeing remains the most neglected area of wellbeing across all sectors. Private sector organisations are somewhat more likely to make efforts to promote financial wellbeing than those in the public or non-profit sectors, but even so, less than half make efforts to promote financial wellbeing…while less than a quarter take a strategic approach.”
Clearly this is an area where more attention and commitment is needed – especially right now. So with this mind, here are five ways we suggest businesses can help their employees with financial wellbeing in 2022. .
1. Break the taboo by being open and supportive
Unfortunately, talking about finances is still a taboo subject in many workplaces. This means employees are highly unlikely to raise it with their employer -and yet it may be the reason they leave and seek work and higher wages elsewhere.
One of the best ways to address the taboo is to introduce HR policies that encourage staff to open up about their concerns without fear of prejudice. This also means educating managers, and is in line with thinking from the CIPD’s Reward Management Survey 2021. The CIPD report observed that “staff are only going to confide in their managers about their financial worries if they know that these managers are going to be non-judgmental and helpful. To assist line managers to be non-judgmental and supportive when talking to colleagues about their money issues, the policy might need to include support from HR in terms of training, toolkits, coaching, and so on.”
2. Be proactive and ask employees what they think
Although being open and empathetic is key, employers should not just sit and wait for staff to speak up. HR teams should also be thinking about engaging with employees proactively through surveys, forums, polls – even if the responses are anonymous . This should help to take the pulse of the workforce (so important right now in what is a fast-moving situation) and help inform any changes that might need to be made to financial wellbeing policies.
3. Try prevention rather than cure
Employers should be engaging with employees about how they can be more financially savvy – for example, by offering financial education through workshops or webinars on how to better manage their money. Such support can be sourced through independent financial advisers or other external trainers. You can also achieve results by pointing people towards trusted websites like the Money Advice Service or Citizens Advice.
It’s best to make a solid investment though and gear up to offer training that really helps and doesn’t just pay lip service to the issue.
Ultimately, employers need their people to perform at their best, and employees who feel supported through troubling times are more likely to stay around and deliver results. It therefore makes absolute sense – both form an employee wellbeing perspective, and a business performance perspective – to invest in helping employees improve their financial management. Many reports in the past such as those by the Money and Mental Health Policy Institute have highlighted that a poor financial situation will have a direct impact on an individual’s mental health, and cause loss of sleep, poor concentration and reduced motivation – all symptoms that any employer wants to avoid.
4. Tailor solutions
When it comes to actual solutions that employers can provide for employees’, think carefully. Financial wellbeing is like physical wellbeing – you cannot offer a single remedy to an entire workforce because everyone is unique. This means solutions should vary from reviewing pay structures, to developing skills to advance promotion, to education to manage budgets and money. Once these fundamentals are in place then tactical tools can be plugged in such as workplace savings (pensions, ISAs, share plans) or in some cases workplace loans. It may also well be the case that what an individual really needs is more flexibility around location (which will reduce travel costs) or some other kind of reward.
5. Make sure your workforce is fully aware of all the benefits you currently offer
Talking of rewards, the CIPD Health and Wellbeing at Work Survey 2021 also reported that just under two-thirds of organisations provide induction materials on rewards for new starters, but far fewer provide ongoing communications regarding rewards and benefits.
This is a mistake. At a time of potential hardship, it will pay to remind staff of any reward and employee savings schemes that you do offer and work to expand it in ways that will improve both mental and financial wellbeing, even if only in a small way. For example, you may be already providing help with gym memberships, savings at retail outlets, eyecare vouchers or perhaps a cycle to work scheme – all benefits that can help people to stay motivated and save money.
For a full rundown of the kinds of rewards and benefits you could provide, visit our employee wellbeing page.