The current cost of living crisis is affecting households and individuals all over the UK. Coupled with the aftermath of the COVID-19 pandemic, some employees are struggling with financial stability.
With rising energy and food prices, employers must find ways to protect their employees and help them manage their financial wellbeing – but how might they do this? First, let’s look at what financial wellbeing actually means.
What is financial wellbeing?
Wellbeing itself is garnering more attention as being important within the workplace, but financial wellbeing can often be overlooked. Financial wellbeing for employees is the feeling of security and satisfaction with their finances; it is how they feel in control of their finances. Poor financial wellbeing could lead to stress and crumbling mental health, which in turn results in poor work performance. With good financial wellbeing, the opposite happens.
One survey in 2022 revealed that only 20% of employees reported that their employers have a financial wellbeing policy in place. With this in mind, it is then crucial for employers to start considering implementing a financial wellbeing policy as well as supporting their employees’ financial wellbeing within the workplace. This can help to improve employee morale, productivity, and motivation.
How employers can help
So, how can employers help with their employees’ financial wellbeing? Here are a few things that could be included in a financial wellbeing strategy or policy in the workplace.
- Financial education – Providing employees with talks or discussions informing and educating them about finance could help relieve some stress and uncertainty surrounding their financial situation. Enabling open and non-judgemental conversations about money and finance helps engagement with employees, and also provides insights for employers on how to better implement their financial wellbeing strategy.
- Cost reduction schemes – Employee discounts or loyalty schemes are a great way to help your employees save money on a variety of things such as household essentials and groceries.
- Financial protection – Supplying your employees with group life insurance to protect them and their families can let your employees have a peace of mind should anything happen to them. It is one less thing for them to worry about financially since their company is already providing it for them.
- Access to financial advice – Research has discovered that 70% of employees admitted to worrying about their finances at work. As a result, it would be worthwhile to outsource professionals within the finance field who employees are able to talk to and ask for advice whenever they need to. This could be an on-site finance expert or simply someone who employees can call or email who can support them in managing their finances.
- Pension contributions – Employers should offer pension advice and even higher employer pension contributions to add more value to their employees’ pensions. This can be beneficial for employees in the long run and improve their financial wellbeing as they can rest assured that they will have funds once they retire.
- Saving schemes – Something a little more experimental is for employers to offer corporate ISAs which can be useful for employees without savings or investments. This can help employees save money either short or long term by directly taking money out of their pay and putting it into savings.
