30th July 2021
When examining the impact of the pandemic, according to a study by LCP – almost half (47%) said the pandemic had changed their ability to save. Of those, more than 1 in 3 (38%) were saving less or not at all, impacting their financial resilience.
Therefore it is not surprising that 90% of employers believe that it’s becoming increasingly important to have a financial wellbeing strategy in the workplace.
With this in mind, WEALTH at work has prepared the following tips as the basis for a good financial wellbeing strategy.
1. Understand the needs of employees
Before any financial wellbeing initiatives are implemented in the workplace, it’s imperative that employers understand the needs of their employees first. This is because each employee will have individual circumstances which are likely to result in different financial priorities.
They should start by assessing the various cohorts of the employee population and considering their different needs: younger groups may want help to save for a deposit for a first home, whereas that probably won’t be a priority for older groups, but a pension might be. It therefore helps to segment the workforce and research what these different groups of the employee population may want and need.
2. Develop an appealing benefits package
Once the needs of the workforce are understood, it’s then important to look at the employee benefits platform itself. A good starting point is to investigate if employees are taking up and using the benefits on offer. Making sure benefits are relevant and well-explained can really help take up and improve personal money management.
3. Help with the basics
Many employees struggle to understand basic financial issues and often fail to realise the various benefits on offer in the workplace. Helping employees become more familiar with this is an important step in helping them to engage with their finances. Getting them to think about how they spend money on everyday items such as utility bills and insurance is essential. A great example of this is car insurance. It is extremely unlikely that you will get a better quote by remaining with your current provider than from shopping around, but many neglect to do this.
4. Good debt vs bad debt
Another important principle is helping employees understand the difference between good debt and bad debt. For example, a mortgage is a form of good debt – it makes sense to have a loan in order to own your home as it is a stable, easy to manage approach to long-term borrowing. However, it should still be reviewed occasionally to ensure you have a good deal. At the opposite end of the spectrum, debt with high interest payments such as payday loans and credit cards can get out of control if they are not repaid quickly.
5. Provide support
A number of methods are available to support staff depending on their preferred learning style and also work environment. For example, do they work in an office or on a production line? (As the methods of delivery may need to be different). Increasing numbers of employers are putting in place a range of options from digital financial health checks coverings areas such as debt and savings through to financial education seminars, interactive tools, video and animations covering everything from the Employee Benefit offering through to retirement planning. In addition, many are putting in place one-to-one financial guidance or regulated financial advice for those who need more support.
Jonathan Watts-Lay, Director, WEALTH at work, comments;
“The link between debt and money worries, lower productivity and absenteeism are increasingly recognised by employers and many are now looking for ways to support their employees following the pandemic.
Building a good financial wellbeing programme is vitally important. From the implementation of financial education sessions to the installation of an online platform such as the ‘Financial Healthcheck’ can play a key role.
Both help to increase knowledge to understand some of the key issues which will help to build financial resilience in the future. This can include topics on a range of financial matters such as debt & money management, managing savings, retirement and health & financial protection.
Not only can this implementation develop understanding and encourage employee engagement, it can also act as a catalyst for behavioural change and action – resulting in added value for both employers and employees.”
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