How to create a financial wellbeing strategy
Pam Whelan, October 07, 2019
Financial worries are a significant cause of workplace stress. So what should you be doing to help employees manage their money?
The summer holidays are now a distant memory. The children are back at school and the next big expenditure is looming – Christmas. According to a 2015 report by American Express the average increased spend over the festivities tops £1,490. It’s likely to have risen since then. For some that won’t be a problem, but for many employees this will be yet another cause for worry and stress.
According to our recent survey carried out with the CIPD, Health and Well-being at Work, a quarter of respondents reported that poor financial wellbeing was a major cause of workplace stress among their employees. More than a third also disagreed that their employees had the necessary knowledge and skills to make the best reward and benefit choices to meet their financial needs. Despite this only one in 10 organisations has a financial wellbeing strategy.
Yet such strategies have clear benefits. Not only do they reduce the stress and worry caused by financial uncertainty, but according to a survey by Barclays they can boost recruitment. Thirty-eight per cent of people said they’d be more likely to work for companies that offer financial wellbeing assistance. The same research also suggests that having such a strategy can boost workplace productivity by 4%.
So how can you create an effective financial wellbeing strategy? Where do you start? What should it include? The following list provides a range of suggestions for what a financial wellbeing strategy should encompass:
1. Build for the future
Pensions are a significant part of any reward package. Instead of just investing the government’s recommended amounts, consider offering to match any increased contribution an employee makes. For example, if an employee adds an extra 2% you could add an extra 4%. Not only does this encourage greater engagement with saving for the future, but it improves pension outcomes too. One less thing to worry about, and a clear demonstration of your organisation’s commitment to financial wellbeing.
2. Money management
If employees understand finance better they’ll be able to make better choices about how they manage their money and their benefits. Consider developing an online portal where employees can seek information on pensions, loans and savings, and even advice on tax. If budgets or expertise mean you can’t do this yourself, find a third party to help you set it up. This should show just where they can go to seek further advice, including access to trained financial advisors if necessary. How about holding a Financial Wellness Week with a range of seminars and advice sessions?
3. Workplace loans
Repaying loans can be costly. So why not offer employees loans through the company? As well as providing better rates than those available on the high street or online this helps employees to take control of their finances in a managed way. Once the loan is paid off why not convert it into a saving scheme?
4. Special discounts
Consider offering exclusive discounts for employees. By working with an external provider you can create a scheme that provides discounts from retailers based both locally and nationally. The local angle also gives an added boost to the community. You could extend this to an employee’s family and friends.
5. Set up a wellbeing fund
As part of the benefits package how about offering access to a specific ‘wellbeing fund’? This can then be used on various wellbeing initiatives such as a gym membership, dance classes, or swimming lessons for the family. Or perhaps the money could be put towards other beneficial activities like learning a new skill, art classes or even driving lessons. This again helps to reduce stress, and allows employees to get out and do things either on their own or to share them with the family.
6. Health benefits
Worries about being able to cope with sickness and ill health can be a major cause of stress. Health plans and dental plans take away much of the financial worry, not least as opticians, dentists and physiotherapy treatments can all add costs to already potentially overstretched budgets.
For many employers in the finance and healthcare sectors this should almost be second nature. It’s your business after all. But whatever your work involves, the steps you need to take to improve your employees’ financial wellbeing needn’t be expensive. Simple ideas can bring significant long-term benefits. Not only will one major cause of workplace stress be reduced, but you’ll see other clear benefits in terms of productivity, retention, recruitment and ROI. Finally, your employees can look forward to the festive season knowing that money is one less thing they have to worry about.
For more ideas on improving financial wellbeing we’ve put together a guide to designing a financial wellbeing strategy, which enables people to take practical steps to get in control of their finances.
Pam Whelan is director of corporate at Simplyhealth