How to help employees manage their financial wellbeing
In our latest workplace wellbeing report, 46% of employers say employee financial wellbeing has been negatively impacted since coronavirus.
At a time when job security and people’s finances are being strained, how important is it for you to look after the financial wellbeing of your employees?
What are the current financial wellbeing challenges?
Money-related problems are the biggest cause of stress for 61% of working adults in the UK – and over a quarter of adults feel stressed about their finances every single day. These high-levels of anxiety were felt before the coronavirus hit in March, leading to falls in employment and income by April. We’re now at a point where money-related stress is only going to get worse.
Employers are missing the importance of financial wellbeing
We found that 67% of employees say financial wellbeing initiatives are the most important elements for job attraction and retention. Yet only 43% of employers share the same sentiment.
If business leaders are failing to see the importance that employees place on financial wellbeing, they’re not just making their company a less attractive place to work, they’re also neglecting the health of their workforce.
Businesses are holding back on financial wellbeing investment
Despite the evidence above showing how much importance employees put on financial wellbeing, 1 in 5 businesses say they have no plans to implement any financial wellbeing initiatives.
It is, of course, the right of those companies to invest their budgets however they please. What’s clear though is employees are bringing their money-related stress to the workplace. Even from a “hard numbers” point of view, investing in financial wellbeing initiatives will increase productivity and the bottom line of the business.
Salaries are being cut at a time when they’re crucial
In light of the coronavirus, we found that 20% of companies cut salaries. This was most prevalent at smaller companies, with 28% businesses with 50–99 employees cutting salaries. This could be a survival tactic for smaller businesses who have less money in reserve than large ones – highlighted by only 12% of companies with 250–500 cutting salaries in light of coronavirus.
Combining data we collected across June and July, 31% of companies in Greater London have cut salaries in light of coronavirus – the most of any area in the UK. On the other hand, only 7% of employers in the South East of England cut salaries. It’s possible that with people working from home and fewer employees commuting into the capital, those businesses relying on mass footfall have had to cut salaries in order to survive.
What’s clear is that at time of great uncertainty, cutting salaries will only go to increasing on the money-related stress already felt by the nearly two-thirds of working adults in the UK.
How to maintain the financial wellbeing of your employees?
Choosing to help your employees manage their financial wellbeing can remove a huge source of stress from their lives, leading them to be happier and more productive in the workplace.
Find the right financial wellbeing initiatives
The disparity between 67% of employees and 43% of employers stating the importance of financial wellbeing initiatives could come from businesses not fully understanding what employees need or want.
There are many ways to help employees improve their financial wellbeing – from employee discounts to online resources to help better manage their finances – but failing to implement what’s needed will result in low engagement. We recommend speaking with our workforce directly to find their challenges and then finding the appropriate solutions for them.
You don’t need to invest huge sums of money
It would be unfair for us to say that companies should invest more money in financial wellbeing initiatives if that money simply does not exist. In spite of this, there are ways you can help employees with their finances which don’t require the investment of huge sums of money – possibly even saving you money too.
Salary sacrifice schemes are a great way to do this. Introducing the right salary sacrifice offering to your workforce will allow them to spread the cost and save tax on goods and services which they already need to purchase. And as an employer, you’ll save on National Insurance contributions for the portion of salary they sacrifice.
Our view on fair pay
Receiving fair pay is necessary for employees to achieve what they want professionally and personally – with success in one of those areas often bringing success in the other. So it makes sense that an employer who pays their staff a fair wage will find more loyalty from them.
You can see our full view on the importance of fair pay here.
Get the financial wellbeing checklist
We’ve put together a to-the-point checklist which can help you to improve the financial wellbeing of your workforce. It includes:
- How to provide financial education
- Why flexible hours are important
- How to make employees’ money go further
- Five steps to better financial wellbeing
Download your copy here or by using the banner below.