Research shows that many employees feel they are not getting enough support to improve their financial well-being. This can affect business operations and cost you money.
Financial well-being is not just about income. It covers things like financial literacy, confidence and a good relationship with money. As an employer, there are several things you can do to help your employees feel more in control of their finances and future.
1 in 5 employees say their employer doesn’t do enough to support their financial well-being
Amid concerns about rising inflation, 19% of employees believe their employer is not doing enough to support their financial well-being. CIPD research.
The report found:
- 1 in 8 workers say their salary is not enough to support an acceptable lifestyle without going into debt to pay for essentials like food and utilities.
- 27% said their salary was not enough to cover a £300 emergency.
- Less than half (47%) said their salary is enough to help them save for retirement.
Worrying about money and long-term financial security can affect your mental health, which can also affect your business performance.
An Egon Poor employee financial wellbeing costs UK employers £6.2bn a year, the white paper reveals. This represents the cost of absenteeism and absenteeism due to financial concerns.
45% of employees said that financial worries made them feel anxious, which led to them taking time off or being distracted at work.
Creating a financial wellness program for your business can mean your employees are happier and more confident, which can boost your business. It can also make your business more attractive when hiring talent in a competitive market.
6 practical steps you can take to support your employees’ financial well-being
Investing in a financial well-being policy is worthwhile.
CIPD research found that 81% of employees whose employer has a financial wellbeing policy said it was important to them that any future employer had one, so this is a very important step.
In addition, these employees were significantly more likely to say their employer does enough to support their financial well-being and provides a good level of benefits.
If this is something you want to put in place, here are six steps you can take.
1. Schedule regular reviews and create progress plans
While salary isn’t the only thing that supports financial well-being, research shows that it’s important to employees.
Regular employee reviews, where salary can be discussed, can help employees talk through their concerns and show how much they are contributing to the company through their work. While you may not be able to meet all salary expectations and goals, being able to walk the talk can be helpful.
Creating a clear progression plan that can lead to a pay rise can also motivate employees and mean they are more confident about their future.
2. Take the time to explain your occupational pension
The study found that many employees are concerned that they are not doing enough to save for retirement.
As most employees benefit from automatic pension enrolment, taking the time to explain how it works, including what you contribute, the tax benefits and how it is invested, can be valuable.
Some of your employees may not understand how much is going into their pension or how it will add up over their working lives.
3. Communicate the benefits you offer effectively and regularly
If you offer employee benefits, make sure you showcase them and communicate them regularly. Whether it’s a salary donation scheme that can make childcare more affordable or discounts at high street stores, it can be easy for employees to forget about these benefits.
Effectively communicating what you offer can highlight how you support their well-being and means employees are more likely to take advantage of them.
4. Consider how you can support long-term financial well-being
As budgets shrink, many people worry about how they will cope when faced with a financial shock. You may already have a policy to support employees in case something happens.
For example, do you offer an enhanced sick pay policy, paid bereavement leave, or group life insurance? Such benefits can support long-term security and mean that employees are less concerned about uncertainty in the future.
5. A directory where employees can go if they are worried
During difficult times, such as when dealing with debt or managing the household budget, your employees can benefit from reaching out for support.
Pointers to where to find trusted advice can be helpful and give them a place to talk if they are uncomfortable discussing issues at work. StepChange can offer advice on managing debt and many other charities can help people who are struggling.
6. Work with a finance professional to support your employees
If you need help creating a financial wellness program to support your employees, or want a financial 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 intended for retail customers only.