However, in recent years, financial wellbeing has become something of a buzzword in the corporate world – and HR sector – as organisations have tried to better support their staff during periods of substantial economic turbulence and uncertainty.
As such, despite some genuine efforts to improve their staff’s financial wellbeing, many employers may be inadvertently putting too much faith into wellbeing initiatives without truly improving their staff’s situation.
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In turn, this has led to a new phenomenon: ‘financial wellbeing washing’.
So, as the cost of living crisis continues, it's vitally important that employers and HR managers are aware of its implications, as well as the ways in which they can have a robust and genuine impact on the financial wellbeing of their staff.
Defining ‘financial wellbeing washing’
Firstly, let’s define what the term ‘financial wellbeing washing’ means. In short, financial wellbeing washing occurs when organisations take a tick-box approach to the support that they provide their employees and fail to address their workforce’s underlying monetary concerns.
According to Mintago’s research, for example, over half (51%) of employers have financial wellbeing initiatives in place, but just 29% of workers say the support they have received has actually improved their financial situation.
Clearly, there is a disconnect between the support many employers are offering and what is improving workers’ finances. This isn’t only disappointing, it has the potential to be damaging to a business: employees with financial troubles report high levels of stress and lower levels of job satisfaction, both of which negatively impact job performance and productivity.
Opening a dialogue for more impactful support
Businesses must embrace a more holistic approach to financial wellbeing.
This requires tailored, targeted support, so businesses must ascertain what tools their staff need to take control of their finances; and who better to identify what constitutes strong support for a workforce than the employees themselves?
Engaging in open dialogue with employees is the all-important first step to improving financial wellbeing initiatives. Indeed, asking their opinion is a simple yet effective way for HR managers and business leaders to work out their employees’ needs and how they can target support.
An added benefit of this approach is that it fosters a culture of discussing financial difficulties openly.
It also encourages staff to ask for support when needed; according to Mintago’s research, a worryingly low 31% of workers are currently encouraged to ask for help with their financial wellbeing when they need it.
With this being said, businesses will be better placed to ensure the support they are providing is effective. Therefore, it’s also important that employers establish targets to regularly evaluate the success of the support initiatives they put in place.
The measures business leaders and HR managers should prioritise
One of the simplest yet most impactful support strategies employers can supply is financial education and training, as many employees lack the necessary financial literacy to improve their finances.
Another powerful support policy is connecting employees with independent financial advisers (IFAs) to help them develop a solid and personalised financial strategy, while adding tools that streamline employees’ financial planning is also highly valuable.
For example, implementing a comprehensive financial wellbeing platform would enable workers to plan for their retirement and optimise the management of their finances in the short term.
Employees can even track down lost pension pots from previous employers and consolidate their finances for the future with platforms such as Mintago.
With so much at stake for employees and employers alike, it is imperative that financial wellbeing support be more than just talk. To avoid financial wellbeing washing their employees, employers should take a hard look at the policies they currently have in place, examine their efficacy by opening a dialogue with their workers and take steps to ensure their financial wellbeing support hits the mark.
Chieu Cao is founder and CEO of Mintago
