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Do more to support employee financial wellbeing

As the cost of living crisis deepens, people are increasingly looking for support with their finances. With a proven link between financial stress and mental and physical health, there is every reason why financial wellbeing should be top of every organisation’s people agenda.

The cost of living crisis has a firm grip on the nation. With the latest figures showing inflation at 9.9% annual inflation (up from just 0.7% in January 2021) and The Bank of England forecasting further inflationary rises to around 13%, the public will feel the pressure for some time yet.

Although inflation usually hits the least well off the hardest, many organisations have recognised the impact it is having across their entire workforce.

More on financial wellbeing:

Financial education is now a necessity

How should you talk to employees about the cost of living crisis?

Cost of living crisis erodes employee trust

From those who are making difficult choices between eating and heating, to those who may be less vulnerable, but are depleting their savings and worrying about budgets – all employees are looking for support and guidance.

Addressing employee financial wellbeing though, is not just about remuneration reviews or discretionary cash payments. While the pay workers receive is a significant and obvious factor for employees, simply increasing pay risks fuelling a cycle of inflation rather than easing current economic woes.

Sadly, 85% of organisations still do not offer education around budgeting and debt, so there is a huge opportunity to help employees with this fundamental skill at a time when the need has never been greater.

Mercer’s 2022 Financial Wellbeing Index research report also showed that only half of the organisations surveyed provide a financial wellbeing hub for their employees.

Both factors leave millions of UK employees without access to basic, understandable and collated financial information and educational content.

Providing financial education is central to increasing confidence and enabling employees to take positive actions that improves their financial wellbeing, which is why Mercer launched its employee Financial Wellbeing Hub as a free resource for organisations to complement their broader response to the cost of living crisis.

The Hub covers all elements of financial wellbeing, providing content to support managing daily finances, and information on how to budget and save money.

Top five tips for employees on the cost of living crisis:

1. Try not to get too overwhelmed. Tackle quick wins first to build confidence.

2. Get a handle on your day to day expenses and identify areas of potential savings.

3. Understand what your employer offers. Employee benefits can support your financial wellbeing and are often overlooked or under-used (e.g. Health Cash Plan, Discount Vouchers etc.)

4. Think differently. From changing your shopping, eating or travel habits; small changes will help right now.

5. If you’re struggling, get help. Don’t ignore rising debt, talk to your creditors and get professional help if you need to (e.g. through the Citizen’s Advice Bureau or an Employee Assistance Programme). 

There has never been a more critical time for organisations to actively support their employees’ financial wellbeing in any way they can – directly or indirectly.

Emma Roberts is principal at Mercer

For more information on helping employees through the cost of living crisis, visit our cost of living learning hub.