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Employers fail to meet increased demand for financial support, research reveals

HR leaders are struggling to meet the demands of employees, -

Employers are underestimating employees’ need for financial support during the cost of living crisis, new research has found.

A report by employee discounts scheme provider Reward Gateway revealed that while 5% of HR leaders say employees’ financial wellbeing has significantly declined in the last two years, three times (13%) the number of workers say this is true.

Employees also indicated that their employer is not offering them designated financial support during the cost of living crisis, with 65% saying their organisation could do more.

Graham James, director at employee benefits and engagement provider Pluxee, told HR magazine that employers are still catching up with pressures on employees’ financial wellbeing.

He said: “Due to cost of living pressures, employee needs around financial wellness have naturally moved ahead of employer provision.

“Over time, we’ll see employers close this gap and reap the wellness benefits of reducing the pressure employees feel over financial stress.”

Read more: Earned Wage Access could calm money worries, CIPP says

Separate research by Pluxee found that 51% of employees are embarrassed about their financial literacy, and 16% of workers said they felt supported in their financial concerns at work.

It also showed that 75% of HR professionals believed they could do more to enhance employees’ financial wellbeing, with 68% noticing a surge in requests for financial education.

James continued that employers should create a culture where employees feel empowered to seek financial support.

He said: “Employers can be put off from tackling financial wellness given financial ‘advice’ is a regulated area.

“Thankfully, there are many different areas where employers can support employees without getting into tricky territory.

“Examples include financial wellbeing and money management apps, financial coaching sessions and hands-on support through wage withdrawal services and even debt consolidation.”

Simon Moyle, CEO of Vivup Employee Benefits, noted that employers should understand what defines their employees’ financial wellbeing to build a strategy that works for them.

He told HR magazine: “Financial wellbeing is when three key elements come together: employees have the ability to confidently manage their finances, can absorb a financial shock and have goals they are on track to meet.”

Moyle recommended building a financial education programme and supportive benefits would help workers’ financial wellbeing.

Read more: Financial education is now a necessity

He continued: “Illustrating how people can impact their own wellbeing is key: £2.50 a day on coffee? Skip that for a month to grow over £50 a month.

“Employee discounts make money go further, so show them how they can save on shopping and utility bills; home and electronics salary sacrifice schemes help relieve pressure for larger goods and spread the cost.”

Jeanette Makings, head of workplace financial wellbeing at Close Brothers Asset Management, noted that clearly communicating benefits with employees would help those most in need of financial support.

She told HR magazine: “Elect mental and financial wellbeing champions. Train and equip them to operate throughout the organisation to continue to raise the profile of all relevant benefits, support and key deadlines.

“Arrange specific support for certain cohorts, for example retirees or those being made redundant, and include debt counselling in employee assistance programmes.”

Makings added that a good financial support programme is not only an essential part of an organisation’s overall wellbeing strategy but it is beneficial for both employees and employers.

The research by Reward Gateway found that HR leaders are struggling to meet the demands of employees, who rate pay rises (62%) and financial bonuses (53%) as the top ways to make them feel more appreciated at work.

Makings told HR magazine: “With corporate budgets always under pressure, it’s vital for organisations that their benefits spend delivers the support their employees want and will use.

“A periodic review, looking at employee take-up, surveying employee need, benchmarking against the market, assessing how best to reuse the benefits budget to really deliver a value proposition is essential for both employees and employers.”