UK employers are failing to provide the financial support and guidance wanted by today’s employees, finds research released by Thomsons Online Benefits. While auto-enrolment means that most employers now provide a pension, their focus on promoting long-term savings options has left employees’ short and medium-term financial needs neglected.
According to research covering 450 UK employers representing approximately 1,800,000 employees:
67 per cent of organisations do not offer any form of financial guidance
80 per cent do not offer workplace ISAs
81 per cent do not offer debt consolidation
79 per cent do not offer mortgage broking
70 per cent do not offer debt counselling
This is despite UK employees facing mounting financial pressures. Data from the Office for National Statistics (ONS) reveals that for the first time since records began, UK households are more likely to be borrowers than savers. Meanwhile, figures from UK Finance show an annual growth rate of 8.3 per cent in outstanding credit card debt in February, the highest for 12 years.
The last year has seen employers intensify efforts to support employees’ physical wellbeing, with 40 per cent more employers now offering private/virtual GP services compared to last year. However, perceived barriers are preventing employers taking the same proactive approach to employees’ financial health. Almost one in four (22 per cent) expressed concern over the risk of getting too involved with the financial lives of their staff, 20 per cent believe that it is not their role to do so and 24 per cent worry about the cost of getting involved. These concerns significantly suppressing the numbers of employers offering financial support.
“This years’ research paints a mixed picture,” comments David Dodd, Consulting Director at Thomsons Online Benefits. “Employers are making clear strides when it comes to caring for the physical health of their employees. However, the gap in financial and mental health support means that they’re failing to deliver a holistic wellbeing strategy. At a time when employees are struggling financially, and the top talent is in higher demand than ever, it’s paramount employers work to help employees with their financial health, or risk losing them to competitors.”
Realising this, energy provider OVO Energy (OVO), has developed a financial wellness strategy to support its people goal of attracting, retaining and growing the very best talent.
“OVO’s all about the people,” comments Joanna Fairweather, Reward Manager at OVO Energy, “so it was essential that our financial wellbeing offering resonated with employees. With over 80 per cent of our workforce under 35, we knew we had to go beyond traditional, long-term savings options. Working with Thomsons, we developed a scheme incorporating a flex fund, workplace ISA and free mortgage broking; offerings to meet the demands of a twenty-first century workforce and to help employees make better financial choices every day.”
While only 10 per cent of UK employers currently have a financial wellness strategy in place, over 50 per cent plan to implement one, indicating their growing recognition of financial wellness as a crucial element within wellness and wider benefits strategies. Those employers taking an integrated, online approach to delivering and administrating benefits are also a step ahead of their peers when it comes to supporting employees’ financial wellbeing. Nearly double the number of tech-enabled employers have implemented financial wellness schemes (15 per cent vs 9 per cent) or are in the process of doing so (26 per cent vs 15 per cent).
The trend is repeated when looking at mental health support, with 26 per cent of tech-enabled employers implementing schemes compared to only 13 per cent of those yet digitalize benefits. Those employers using technology to administer and inform ongoing strategy are far more likely to identify the need for holistic wellbeing schemes and make the case for their implementation.
“Digitally-enabled HR and benefits teams are already leading the way when it comes to making the case for changing benefits to better support their employee’s personal goals” comments Dodd. “The data generated from benefits technology provides employers with unprecedented insight into their workforce, enabling them to track take-up, identify trends and determine how they can better support their employees at the moments that matter.”