Having good financial wellbeing means an individual has enough money to cover their financial needs and the financial freedom to enjoy their everyday life.
This will mean different things to different people and is likely to change and evolve at different stages at a person’s life.
There’s no doubt that employee wellbeing and performance are inextricably linked and while businesses are spending more time and effort focussing on employee mental health, lots more could be done to promote financial wellbeing.
The Employer’s Guide to Financial Wellbeing 2019-20 found that 36% of employees worry about money and that people who worry about money are more likely to have a mental health issue like anxiety or depression.
In addition, it is predicted that poor financial wellbeing is costing UK businesses £15.2bn each year
Talking about money is somewhat of a taboo subject in the UK but with financial anxiety being rife among the British workforce it is important that employers tackle it head on and support the financial wellbeing of their staff.
It’s in every employer’s best interests to take the health and wellbeing of their staff seriously and there are many ways that they can promote positive financial wellbeing.
Pensions – Offering a pension is now mandatory and the most common way that employers support their employees financially however; many employees, particularly the younger generations, still have very little understanding of the benefits of a pension. Educating your workforce on pensions is always beneficial and is a great way to reinforce that you are contributing to their financial wellbeing.
Financial Advice – Whether it’s pensions, budgeting , managing debt or advice when making a big financial decision, providing regulated information is a great way for your employees to be more informed and therefore more in control when it comes to their finances.
Competitive Pay – As an ethical employer you should be providing your staff with a competitive salary that fairly reflects their skills and responsibilities. It sounds like an obvious statement but it is surprising just how many businesses pay the minimum wage and expect much more from their people. This is particularly true in commission based jobs. The uncertainty around how much an employee will earn each month, coupled with challenging targets will undoubtedly raise their stress levels. Ethically, all employers should ensure that their pay structures don’t negatively affect the financial wellbeing of their staff.
Pay for Expenses Upfront – If your employees travel for work, consider paying for their expenses upfront rather than asking them to claim them back at the end of the month or quarter. In some cases employees may be covering hotel and travel costs themselves until they recoup the money at a later date and this could be causing them unnecessary stress if they have a tight budget.
Sick Pay – Levels of presenteeism are on the rise and this is mainly because employees fear taking time off, often because they won’t get paid. However, it does no body any favours having a sick employee at work. Providing sick pay will benefit your company culture in the long run.
Cost Reduction schemes – If your employees travel a significant distance to get to work and use public transport, why not subsidise their travel costs. Alternatively, employers could support these employees by paying for their travel cards upfront and allowing them to repay the cost through pay reductions each month. This would prevent them having to pay a large sum upfront and potentially be left without enough money for the rest of that month. Other cost reduction schemes could revolve around gym membership or child care.
Financial Wellbeing should be at the top of all employers list of priorities when it comes to looking after their staff. With improved staff wellbeing linked to improved productivity, staff engagement and an increase in profits, can your business afford to ignore it?