Financial wellbeing – closing the employer-employee gap
While employees might welcome a focus on financial wellbeing many employers are yet to consider it. What can be done to close the gap?
If you ask an employer to state what matters most to their employees they’ll probably list the top three concerns as workload, career development and the work/life balance. If you then ask for the top three from an employee perspective you’ll get finance, physical health and work/life balance. So at least they agree on something.
As we’ve seen in this series of articles already, financial wellbeing is far higher up the employee agenda than many employers like to think. There is a clear disconnect between employer and employee. Ask an employer to judge how their employees rate the company’s financial wellbeing performance and 50% say their employees think they care. Ask those same employees to rate their employer’s financial wellbeing performance and only 32% think their employers care about this.
According to our survey more than half of all employees would welcome support with understanding their finances and how to manage them – both long and short term. But for many employers financial wellbeing strategies are still in their infancy. Only three out of 10 had what could be called ‘a well-developed wellbeing strategy' that also encompassed personal finance, retirement planning and employee benefits. Just over a third (34%) had a strategy but it didn’t comprehensively cover all areas of financial wellbeing. A further 29% had no strategy at all in this area. Of those, 17% said they were considering it and 12% had no plans to introduce financial wellbeing.
Yet we know that a significant number of employees have financial worries. These are not left at home when they come to work. For many they manifest themselves in terms of stress, sleep loss and even absenteeism. In many cases the fear of what might happen to them is more debilitating that their present reality. Almost a third of employees (32%) have less than a month’s savings, and 14% have no savings at all.
Lifting the nagging worry that this represents is vital. In this case it’s good to know that for many organisations financial wellbeing is rising up the agenda, and steps are being put in place to address this. However, the gap still remains between perspective and reality, and until we close that gap a significant number of employees will continue to be haunted by debt. This will continue as long as financial wellbeing is seen as the poor relation of good physical or mental health.
As well as education, it’s important too that employers look again at benefits. We are constantly told that the world of work is changing and that patterns of employment are changing too. Yet benefits packages remain much as they have done for decades. Yes there are core needs that any package has to address; such as a pension and death-in-service benefits, yet for many the flexibility of their benefits has not kept pace with the flexibility now expected in the workplace.
A one-size-fits-all approach to benefits is no longer either effective or providing good value for employer and employee alike. By aligning the focus on what really matters to the employee benefits can be more closely fitted to their real needs. Benefits that support the employee’s feeling of financial security – and lift the burden of fear – have to be a vital part of the package for many.
Only when the gap is closed between what employees really require from their employers in terms of financial wellbeing and what employers are able to offer, will we be able to start to create the right environment for financial wellbeing to thrive. If we can do that a happier and more secure workforce will be in sight. And happy and secure workers are more willing to go that extra mile, feeling their employers really know them and are willing to provide the tools they need to succeed.
Heidi Allan is head of employee wellbeing at Neyber