HR’s responsibilities are growing ever more extensive as the workplace becomes increasingly complex. The recent focus on mental wellbeing has seen the topic escalate in the news agenda and wider society, with big repercussions for businesses as employees come to expect greater activity from employers on how to tackle the issue. However, wellbeing constitutes various different parts of an employee’s life. More recently, there has been a surge of interest around employers considering the financial wellbeing of employees and it seems likely that expectations around this need will only continue to grow.

Financial wellbeing is a difficult area to manage, and raises issues of employer intrusion as well as a potential conflict of interest. It’s worth remembering that the same might have been said about mental wellbeing just a few short years ago. We have fortunately seen the stigma around conversations about mental health considerably reduced, and it seems likely that workplace support for financial health will become the new norm. Ultimately, financial issues can cause a great deal of stress and can have knock-on effects on productivity just like mental health issues. It is therefore in both the employer’s and employees’ best interests to tackle the issue, and it is for HR to find the best ways to approach a financial wellbeing strategy.  

What kind of strategies should be implemented though? Education takes priority, particularly around pension schemes. The government has ensured this is an obligatory requirement since the introduction of auto-enrolment contributions last year, but employers can still play a role in providing key information to employees. While there may be limitations on what an employer can advise, they can still make a sound contribution by offering information and access to services that better inform employees. They could even look to bring in specialised third-party financial providers to provide advice. In this light, it is also important for employers themselves to search for key information and do adequate research to inform on what financial issues their employees are facing. Drilling down into demographics and understanding the financial needs of different kinds of employees, from young grads to those saving for their first house, is important to know what is potentially on their minds.

Employees may have also become complacent about their retirement savings since the introduction of auto-enrolment because they then assume that their employer is taking care of their pension and therefore they don’t need to worry about it. However, for a lot of people the savings in their workplace pension will not be enough to provide for their retirement.

Going further, employers may want to consider reinventing standard systems. Research included in the 2008 book Nudge, written by economists Richard H. Thaler and Cass R. Sunstein, emphasises the importance of choice architecture in nudging people to make the most helpful decisions. The text discusses how paying employees biweekly instead of monthly leads to people being able to save more, due to the fact that twice a year they receive three pay checks in the same month.[1] There have also been discussions around technology that can allow employees to be paid as soon as they have earned the money, which could be a help to those struggling to make ends meet.

Recent news on financial wellbeing has focused on John Lewis launching a housing rental benefit for over 85,000 staff. Brought in this month, the scheme allows John Lewis employees, or partners, who rent properties to reconcile their rent payments and then add these payments to their credit history as a way to improve their credit rating. Furthermore, partners can utilise an insurance-based, deposit free alternative to typical cash deposits, allowing them to more easily rent a property without stumping up a large cash deposit.

While some solutions may be more challenging, the important thing is to start reconsidering, and then innovating the standard systems we accept without question, and for businesses to start to see their employees’ financial wellbeing as part of their remit. If employers feel safer and more secure in their personal lives they are more likely to be engaged and motivated in the workplace, ensuring that the resource and time invested by the employer reaps benefits in return.