Many employees feel in the dark with their finances and the impact of this is being felt in the workplace.
In fact, research* shows that 78% of employers believe that financial worries cause increased levels of stress amongst employees, 43% think that it results in lower productivity and 31% believe that it leads to absenteeism.
It’s important to help employees feel secure when it comes to their finances and a relevant and well communicated financial wellbeing strategy can deliver on this.
WEALTH at work, a leading provider of financial education, guidance and advice in the workplace has therefore put together its top 5 tips on how to build a successful financial wellbeing strategy to help.
Research employees’ needs
Firstly, it’s important to understand the individual needs of employees. For example, some will be looking to buy their first home, whereas others are preparing for retirement.
The key is undertaking both quantitative and qualitative research. For example, a good place to start is to look at the benefits on offer and the take-up rates. Are certain benefits popular for certain cohorts of employees or perhaps some benefits have poor take-up across all employees? Poor take-up could be because the benefit isn’t attractive to the workforce so should be replaced with something more appealing, or it could be that employees don’t understand the benefit and how it could help them. Feedback from employee focus groups shows that there is often a big difference between what reward departments believe employees understand and the reality.
Develop an appealing savings package
Start by thinking about what savings vehicles are suitable for each employee cohort. It can help to look at it from a short, medium and long term savings view.
Short term normally has a time horizon of less than 5 years and may include areas such as saving for a car, holiday, wedding or possibly a deposit on a first home. Cash individual savings accounts (ISAs), Lifetime ISASs or share scheme such as Save as You Earn are often used for these purposes.
Medium term normally has a time horizon of over 5 years and may be used for saving for school fees, moving house or other larger purchases. Equity ISAs or savings vehicles such as a Share Incentive Plans may be useful.
Long term traditionally refers to the pension as a core part of retirement income planning.
Empower employees with financial education
The next step is providing employees with tailored financial education to aid understanding around various financial issues and how the financial benefits on offer in the workplace can help. The key is to offer a range of topics from flexible benefit windows and general money management through to more specific areas such as share scheme launches and maturity, and retirement planning.
Maximise employee engagement
Any financial education should be interactive and engaging, aiming to create deep and lasting understanding; the most effective way to do this is through face-to-face seminars or one-to-one sessions. However, this may not always be possible so online education formats which include digital nudges, webinars, webcasts, animation and tailored organisation-specific interactive microsites can also offer an effective method of communication.
Bring in a provider
Many employers are unable to offer this support themselves, hence the need for specialist financial wellbeing service providers. They should be able to help employers to develop a financial wellbeing strategy that is tailored to their organisation and employees.
Jonathan Watts-Lay, Director, WEALTH at work, comments;
“It’s not uncommon for employees to face financial worries at various stages of their life – whether that is dealing with debt, concerns over retirement savings or making the monthly budget work.
The link between debt, money worries and stress, lower productivity and absenteeism are increasingly recognised by employers and many are now looking for ways to support their employees.
The best way to achieve this is by integrating a financial wellbeing strategy which provides employees with the knowledge to make informed financial decisions. Not only can this help employees feel financially secure but it can also drive improvements in employee engagement, productivity and retention.”
* All statistics quoted are from Reward: Wellbeing in the Workplace 2018