This has led to growing pressure on employers to enhance their financial support. Pressure comes from various sources: employees themselves, competitors, innovative financial wellbeing providers, government and regulatory initiatives, and a genuine desire to support their teams and the business.
How the employer/employee relationship is changing around financial wellbeing
In the past, the relationship between employers and employees was mostly transactional.
Today, both sides have evolved expectations. Employees seek workplaces that are safe, flexible, and inclusive. Employers understand that their employees are individuals with complex lives and diverse needs. Workplaces are now viewed as communities that should provide comprehensive support, beyond just a paycheck.
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Research supports this shift. According to PwC’s Financial Wellness Survey 2023, 73% of people reported being more attracted to an employer that cares about their financial wellbeing. This trend can benefit both employers and employees, leading to healthier, happier, more loyal and productive teams. We believe this is a shift that every industry can and should embrace.
However, the challenge lies in providing financial support that is effective, sustainable, and clear with its boundaries.
Where do the boundaries lie?
Employers may feel cautious about initiating conversations around money. Some fear it could lead to requests for higher wages or criticism from employees who find financial support too intrusive. There is also the regulatory concern of not crossing into financial advice.
Employees, too, might hesitate to engage with financial support at work. Some might feel uncomfortable sharing personal budgeting information or worry about data protection and the security of digital solutions. The effectiveness of financial support depends significantly on how it is delivered and perceived by employees.
From an employee’s perspective, they can set boundaries by choosing not to engage with the financial benefits offered. This should be an informed decision, made with a clear understanding of what the benefits are, how the service can help, what they risk losing by opting out, and how to access the benefits.
From an employer’s perspective, boundaries are often defined by budget and resource limitations, or in some cases the cultural mindset within the organisation. It’s crucial to strike a balance that respects both the needs of employees and the constraints of employers.
Effective financial wellbeing support
Foundational measures like flexible work arrangements and fair wages can significantly reduce financial stress. Flexible pay options, such as on-demand pay, can help employees manage cashflow issues without turning to payday loans. Payroll savings schemes can make it easier for employees to build an emergency fund.
Providing transparent, unbiased financial education and planning resources empowers employees to manage their finances better without feeling patronised or controlled.
Employers can also direct employees to third-party support services. By doing so, they can offer valuable assistance without overstepping their role.
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Training HR, managers, and internal champions to encourage open and inclusive conversations and direct colleagues to internal and external support can be very effective.
This approach is cost-effective, quick to implement and ensures employees get the support they need when they need it most.
The opportunities for employers to support employees' financial health are growing. The solutions don't have to be complex or costly.
It is crucial that the support provided is relevant, inclusive, and genuinely addresses the needs of employees. Financial benefits should be offered with appropriate training, robust policies, and clear communication, so they can be used effectively by those who need them most. By doing this, employers can create a supportive environment that benefits both the business and its employees.
Rachel Harte, is co-founder of online training course Money First Aid
