What can HR do to support financial wellbeing now?

The cost of living crisis makes it difficult for employers to offer significant pay rises and bonuses beyond what has been budgeted. Organisation costs are soaring, after a long low revenue period during covid.

On top of that, talent retention challenges like ‘The Great Resignation’ and ‘Quiet Quitting’ mean it’s a tough time to be holding the purse strings. And of course employees are struggling with rising costs too. HR teams must expand employee wellbeing programmes to provide tailored, sustainable support for financial wellbeing without blowing their budgets.  

What does financial wellbeing mean?

Financial wellbeing means feeling in control of your finances and secure about your financial future. It means you can meet your bills and payments today, but also cope with unexpected costs like the boiler breaking or having to pay for car repairs. Financial wellbeing is usually broken down into 3 areas:

1. Financial literacy. How do I budget with the increase in prices? What’s the smartest way for me to cut costs? How do I improve my credit rating?)
2. Managing problem debt. We all carry some type of debt, such as a mortgage or student loan. Problem debt however means that you are unable to keep up with the repayments, so the debt becomes a burden.
3. Longer term savings, investment and retirement. Financial wellbeing includes providing future financial security with savings, or a pension.

What is employee financial wellbeing?

Financial wellbeing in the workplace means helping employees feel financially secure, confident about managing their finances, and prepared for the future. What people need from employee financial wellbeing will differ depending on their personal circumstances, life stage, goals and ambitions. The goal of any financial wellbeing support should be to ensure employees feel in control of their finances and informed about how to manage them.

Why is employee financial wellbeing important?

Most organisations recognise that financial wellbeing is an important part of a holistic employee wellbeing programme. As the cost of living crisis deepens, support from employers will be more vital than ever. Salaries are not increasing in line with inflation, meaning that many employees are faced with spiralling costs and money worries. This leads to increased stress at work.

We know that when employees are worried about finances, their performance and productivity suffers. Nine out of ten employers agree that financial concerns impact upon staff performance. Neyber’s research shows 20.3m British workers – 3 out of 5 people – of all income groups are affected by money worries, costing the UK economy £15.2 billion:

• 1.6 million employees taking time off work
• Nearly 3 million employees struggling to focus at work
• 3.6 million employees looking for a new job because of money worries

There is often a drop off in engagement levels as well as an increase in colleague turnover. In fact, People Insight’s experts predict financial wellbeing will be a key driver of the employee experience in 2023, as our 2023 trends report shows.

So offering employees support with financial wellbeing is not just the morally right thing to do. It is important for your organisation too.

Examples of financial wellbeing support for employees

Beyond a fair and competitive salary package, there are a wide range of solutions that organisations offer to support financial wellbeing.
The best financial wellbeing tools are those that are well communicated. It is clear what need they meet and how they can be accessed. Anything overcomplicated won’t get the desired take up. Employees are simply to busy to wade through pages of dry financial policy. Below, we share examples to inspire your financial wellbeing programme.

Line managers can signpost financial wellbeing support

The first person to see that an employee has a concern is often a line manager. Yet line managers are not mental health experts and can’t be expected to have all the answers. It can also be difficult for employees to open up about financial problems to their manager, out of shame or embarrassment. StepChange’s data shows that the stigma around money means people wait up to 12 months before speaking up.

In order to best support team members, equip your line managers with knowledge of the resources, tools, and external support available. Encourage them to sign-post employees to the appropriate help, that they can choose to access away from work. Charities like StepChange also partner with organisations to support colleague financial wellness.

Hear advice from StepChange for managing conversations about financial wellbeing:

https://youtu.be/Leho3JlNTJ8

External advice to improve financial literacy  

The world of finance can seem complex, dry and difficult to access for a lot of people who don’t feel confident in their capabilities with money. Traditionally, financial advice was perceived as something for wealthy people. Today, as well as more traditional Employee Assistance Programmes,  platforms like Bippit and  Neyber  have surged in popularity, as they provide accessible, human support; qualified financial experts ( in person and via the platform) to talk to about everything from understanding tax to planning savings. This sort of advice may have previously felt inaccessible to younger or lower income staff.

One-off cost of living payments

A number of UK employers are topping up staff salaries with one-off ‘cost of living payments’ to help people weather rising costs. Organisations are taking different approaches, with some scaling payments according to seniority while others are offering a blanket payment to all.

People Insight client StepChange shared their approach to cost of living payments: 

Modernise traditional financial benefits 

In the UK all employers must offer a workplace pension scheme by law, but all schemes and contributions are not created equal. Some organisations (e.g. Anglian Water) contribute double the employee’s contribution, others go even further.

Some organisations provide workplace savings schemes with a shorter time horizon than a pension, for example lifetime ISAs (e.g. at Gattaca,) beneficial for those trying to buy first home. Others provide private health, dental insurance and reimburse eye tests.  Some (like People Insight client, what3words) provide interest free loans for things like train season tickets or railcards. There’s modern life and critical care insurance from organisations like Yulife, who also provide a wellbeing app that uses gamification to boost better physical and mental health.  Additional tools include  Wagestream, which works with payroll to give people the flexibility to choose how and when they get paid.

Remember, financial wellbeing needs will differ by employee.

That’s why employers such as People Insight client StepChange the debt advice charity, gives staff the opportunity to buy and sell annual leave to meet their personal requirements. Another People Insight client, TSB now provide ‘Flexi Benefits’ described as:

“An extra amount of money we give you, equivalent to 4% of your salary, which you can choose annually to spend on a variety of tax efficient benefits – such as critical illness cover, childcare vouchers, or additional medical cover.”

These choices are a fantastic way to achieve one of the goals of financial wellbeing; employees feeling in control of their finances, because they’ve proactively chosen how to engage.

Offer cut price company products or services 

A significant financial benefit can be provided to employees in the shape of the organisation’s own products and services provided for free or at discount. JoJo Maman Bebe, a B-Corp organisation, give staff 40% discount off product. Hellofresh have a very generous financial wellbeing policy and give staff 70% discount on their food boxes. PPHE hotel group offer complimentary stays, free meals at work, discounted hotel rooms for family & friends and 50% off food & beverages.

Discounts are everywhere 

There’s a plethora of providers such as Perkbox offering discounts for everyday to big-ticket purchases to help people ‘stretch their salaries’. 

A free or discounted gym membership is great but not everyone wants one. Many organisations are now offering more choice of memberships. For example access to apps that support wellbeing and personal development, such as Headspace, Learnerbly and MoreHappi are appealing to Gen Zs. 

Salary sacrifice and GAYE are efficient ways to spend 

Salary sacrifice or paying for products and services from gross not net salary, is commonly associated with benefits like childcare vouchers and cycle to work or tech schemes.  In addition, Give as You Earn (GAYE) schemes like provided by CAF allow employees to donate to charities from salary before tax. 

Financial wellbeing support doesn’t have to cost the earth

In these challenging times financially, there are many non-financial employee rewards which ease the load for employees. Remote and flexible working can reduce the need for childcare and pet care. For office workers, bringing your dog to work also benefits. Free office breakfasts, coffees, lunches or snacks build up over the year to reduce takeaway expenses. 

How can you measure if your financial wellbeing support is helping?

There are many ways to support employee financial wellbeing. To ensure these are hitting the mark, organisations must measure the uptake and impact of your initiatives. 

People Insight’s THRIVE wellbeing framework is designed to assess organisational wellbeing, including how effective your financial wellbeing initiatives are. An employee wellbeing survey based on THRIVE helps you measure workplace stress and highlights where people need extra support. It also provides actionable results so you can create change in response to employee feedback. 

Find out more about our wellbeing surveys here, or get in touch to discuss your specific survey needs.