Financial wellbeing webinar: Who's looking after the pennies?

Employees’ financial worries are growing so our webinar explored whether HR can and should be helping

“Over the past three years we’ve seen the [financial] challenges employees are facing become more prevalent,” said Heidi Allan, Neyber’s head of employee wellbeing.

People are faced “with fluctuating incomes because of the economy and the uncertain times the UK faces”, they have “to borrow regularly”, and they have “a lack of savings and a lack of resilience for when life throws curveballs”, she continued. To put it bluntly, “people feel out of control and uncertain of what the future world holds for them”.

It’s certainly a bleak picture. But it’s one Allan, speaking at HR magazine and Neyber’s ‘Health check on financial wellbeing’ webinar, isn’t alone in painting.

Stefanie Foulerton, Zurich UK’s head of performance and reward, added “macro trends” such as housing issues to the mix, saying that “everyone is feeling the squeeze”.

And the issue is especially dire for certain groups said The POD Consultancy founder Martyn Dicker. “Young people face particular concerns around financial wellbeing, with young women facing more concerns than young men,” he said. “People living in London” are also feeling the effects, he added.

It then comes as little surprise that a staggering 80% of respondents to a poll taken during the webinar agreed that money worries are intensifying for UK workers. So what should HR do to ensure workforce financial health in the face of these challenges?

The practicalities

“The education piece is so important,” said Foulerton. “So many people live to get through the month and aren’t considering the long term, so it’s about opening that up.”

She recommended HR “improve internal comms” and ensure the base pay employees receive is “fair”. “What is a decent wage people can survive on and meet their commitments with?” she urged HR to ask.

There’s lots of free advice out there, added Dicker. But it’s key to not assume you know what employees want without asking. “There’s the assumption young people want more leave and older people want pensions – it might be the case for some but it also might not be.”

The reality

While agreeing the important role HR has to play, the panel said that current initiatives leave much to be desired. They “weren’t surprised” by poll results in which 70% of respondents said their organisation and HR department is currently not very mature or not mature at all in terms of awareness and initiatives around financial wellbeing.

Allan put this down to financial wellbeing being the neglected cousin of employee wellbeing more widely. “The financial wellbeing agenda is where mental health was four to five years ago,” she said.

HR needs to remove the stigma, as “the British don’t like to talk about money”, she said. For Allan encouraging employees to “share stories of having come out the other side” of financial issues is key. But she warned of the “danger” that “some organisations have a physical wellbeing pillar and a mental wellbeing pillar and a financial wellbeing pillar – there’s a need to pull these together and think about the person as a whole”.

Gig workers in particular are often neglected in the debate, Dicker added. “Employers with these peripheral [workers] maybe don’t feel a sense they need to provide [financial education] but these are the workers who probably need it more.”

The balance

While the panel discussed the ways HR can support staff, there was much debate around just how involved HR should be in employees’ finances.

“Many believe people earn their money at work so should be able to access financial support there. But the other school of thought is that personal finance is personal for a reason,” explained Allan.

Respondents to a poll supported this mixed picture. When asked if it is the employer’s place to assist on matters of financial wellbeing only 21% believed ‘yes absolutely’, while 25% thought ‘only on a very few small areas’.

For Foulerton the answer lies somewhere in-between, with the business having a responsibility “to suggest but also trust people to make the right decisions”. She pointed to the use of “nudge theory”,for example sending personalised emails off the back of the Autumn Budget.

Allan agreed it’s about giving people “choices”, but not to the extent where “they can’t see the wood for the trees”. “We’ve all been in a shop with too many options,” she said, suggesting a need to narrow these down, provide the “right level of info”, and propose the best options.

This means moving away from “a suite of benefits”, added Dicker. Referring to “loss theory” he highlighted that people “feel losses more than gains”, so someone will “need £10 tomorrow to make up for a £5 loss today”. So instead of a large suite that employees must choose between, HR should “work out what’s the best offer so people don’t have to miss out on something,” said Dicker.

The hurdles

Striking this balance between care and intrusion is just one of the hurdles to launching a successful strategy. Being unsure where to start was cited as the biggest challenge in an audience poll (with 27% finding this an issue), but lack of resource, senior buy-in, and reticence around getting the education and advice balance right were also acknowledged.

Rather than worrying about getting it right Dicker recommended firms “start off small” as “one size fits none”. “Don’t be put off by trying to do anything too grand,” he advised.

“It doesn’t mean spending vast amounts of money,” agreed Allan. “Do small things like signposting to money advice services or small step changes that offer help and support.”

On the topic of senior buy-in, if macro issues “aren’t hitting the mark… make a commercial case for it”, said Foulerton.

This means looking at the data and spotting trends, she said, giving the example of high absence rates leading up to payday because some people can’t afford to travel to work. “If senior leaders won’t buy into financial wellbeing take it down to the pennies and the profits,” she said.

After all the issue isn’t going away warned Dicker, citing “lots of concerns looking forwards”.

But for all the challenges it seems progress is being made. “If you asked me six months ago [if only a few companies are leading the way with financial wellbeing] I’d have said yes,” said Allan. “But now it’s becoming much more mainstream.”

A recording of this webinar is available here. HR magazine's next webinar is on 'Beyond awareness: Taking action on employee mental health', in partnership with Perkbox. Register for the webinar on Wednesday 30 January at 12.30pm here.