Financial wellbeing should always be a top priority in any business, but now, with the financial uncertainty associated with the pandemic, it becomes a critical topic that needs to be addressed.
With unemployment levels rising and predictions that redundancies are set to increase rapidly before the end of the year, many employees across the country are fearful and anxious about their financial situation.
Now, more than ever, it’s vital that businesses have the right resources in place to support their employees.
So, what is financial wellbeing?
Someone with good financial wellbeing has enough money to cover their financial needs and has the financial freedom to enjoy their everyday life. They are in control of their finances and have a sense of security.
Studies show that poor financial wellbeing has a knock-on effect on various aspects of a person’s life, including their performance at work. They may be losing sleep or are preoccupied with their worries, and it’s likely that their mental health will deteriorate because of it.
This can have further implications on their morale and performance at work, with lower productivity and absenteeism costing businesses a huge £15 billion per year! [1]
How can businesses support the financial wellbeing of their staff?
Talking about money and finances is somewhat of a taboo subject, particularly in the UK and so the first step in addressing financial wellbeing is opening up dialogue for those who need it.
Employers should be able to provide their employees with a safe space to talk about their worries and financial concerns because it’s when people bottle these up or ignore the warning signs that these issues escalate.
The increase in remote working has made it more challenging for employers to identify employees who may be struggling with their mental health which is why a conscious effort is needed now, to ensure these people don’t go unnoticed.
It’s in every employer’s best interests to take the health and wellbeing of their staff seriously, including supporting positive financial wellbeing.
Understanding employee needs
Every workplace will have a different employee demographic, from different areas, back grounds and ages. All of these variables mean that every employee’s needs will be different. The best way to identify exactly how best to support your employee’s financial wellbeing is to ask them. This could be a consultative approach or a survey. This is also a great opportunity to open up the initial dialogue and break down those barriers of anxiety and even shame that can surround talking about finances.
Regulated Advice
One in five workers say they would value broader financial guidance, debt management and counselling if they were in financial hardship, according to Barclays.[2] By providing free, specialist, regulated advice on a broad range of financial topics businesses can show they’re serious about supporting their employees financial wellbeing. Simply having the opportunity to talk and be offered guidance on what can be a very worrying situation, is a lifeline for those who are struggling. Having access to this kind of advice can alleviate a significant amount of pressure so that person can better focus on their role.
Open and Honest Communication
Remote working may have posed initial challenges in terms of maintaining strong communication with employees, but this cannot be used as an excuse. Now more than ever, employees will have questions and concerns about their finances, particularly if they have been on furlough due to the pandemic. It’s important that managers check in regularly with employees whether they are on furlough or not and are able to have open and honest conversations with them about how the business is faring. If an employee needs specific advice, they should have access to free support.
Competitive Pay
An obvious point perhaps but an extremely important one; employees should be paid a competitive salary that fairly reflects their skills and responsibilities. So many businesses pay the minimum wage yet expect much more from their people. Furthermore, in commission-based roles, employers should ensure that their pay structures are easy to understand and achievable. For many people in these types of jobs, uncertainty around how much an employee will earn each month, coupled with challenging and sometimes unattainable targets can have a significant impact on their financial wellbeing.
Cost Reduction Schemes
Offering salary sacrifice schemes or employee discounts can be a great help for many staff. This could include pension contributions, childcare vouchers or cycle-to-work schemes. Another idea is partnering with local businesses and agreeing a discount for things such as food or gym memberships. All of these small things add up to enhance the financial wellbeing of employees and demonstrate that as an employer, you are committed to supporting this important cause.
There are lots of simple, yet effective steps that employers can take to help their staff feel more in control, from opening up conversations around money to reviewing and revamping the company’s benefits package.
What’s clear is that prioritising financial wellbeing has multiple benefits for both the employer and employees. Not only will staff be more engaged and productive in their roles, the business will also become more appealing when it comes to attracting and retaining top talent because of their commitment and positive company culture.
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