With poor financial wellbeing impacting on productivity, a new paper shows that, despite growing interest, there remains a lag in employers taking action in this area – and that Human Resources departments are key to building a business case for support.
Published by the Institute for Employment Studies (IES), the paper, Building the business case for employee financial wellbeing, draws on findings from a Money Advice Service-funded study trialling financial wellbeing guidance from IES and the Chartered Institute of Personnel and Development (CIPD).
The paper reveals that misplaced concerns and outdated attitudes are key barriers to support for employee financial wellbeing amongst senior leaders. While common concerns include the invasion of employees’ personal financial lives, the evaluation highlights how these attitudes may be unfounded, with many employees questioned in the study welcoming greater engagement from their employer.
It goes on to highlight the key role of HR teams in building the business case for support, tackling myths and encouraging organisations to help employees make better financial decisions; and reap the business rewards. Strengthening the employer brand, an improved reputation through corporate social responsibility, and links between wellbeing and productivity are all areas that HR can evidence to capture senior interest and buy-in for engagement on employee financial wellbeing.
Catherine Rickard, senior research fellow at the Institute for Employment Studies and lead researcher of the study said:
‘Employees at all life stages and in all income brackets, require financial skills and education, especially in the context of removed defined-benefit pension plans and the growth of flexible benefits. This has provided choice and flexibility to employees, but assumes employees have adequate knowledge to make the best personal financial decisions. Therefore, employers need to make the shift from taking reactive approaches to employee financial wellbeing struggles, towards more proactive prevention.’
Charles Cotton, performance and reward adviser at CIPD, the professional body for HR and people development, said:
‘Poor employee financial wellbeing is a clear and present danger for companies and their investors. Money troubles can reduce employee health, lower their productivity, affect firm performance and weaken the organisation’s brands. This report not only highlights how HR can make the business case for having an employee financial wellbeing strategy, it also gives advice on how to create and implement a financial wellness programme at work.’