Recent surveys tell us that poor financial wellbeing has a considerable impact in terms of anxiety, stress and psychological health – and, in turn, this is affecting workplace productivity. As many as one in four employees say financial worries are affecting their job performance through their reduced ability to concentrate, the effect on their short-term decision-making and increased absenteeism.
‘Financial wellness’ is the new buzz-phrase, but best practices for these new corporate programmes have yet to emerge. HR and reward managers may find themselves charged with driving these new schemes, and decisions they make in the early stages will be key to their success.
We know from previous programmes around financial education – indeed any change programme –that encouraging behavioural change is not an easy task. Supplying information that benefits the consumer, or employee, is a laudable mission but this may be time and money wasted if the intended audience is not engaged and applying the information.
So how do we ensure a financial wellness programme has any chance of success? HR professionals will be familiar with the role of psychology and emotional intelligence in connecting with employees, but it’s important that this is applied right from the beginning. That is, effort should be put into engaging employees before educating them through any wellness programme that might offer money management and planning tips, information on different types of savings vehicles, and details of the range of company benefits provided.
Research that we have done with the School of Life shows that a good place to start is through self-awareness: getting employees to understand their lifestyle and planning needs and, importantly, their relationship with money. Is their relationship steady or erratic, maybe high maintenance or just ‘good friends’? This emotion-based approach highlights employees’ money skills or lack of them, and creates better engagement and receptiveness to the practical guidance on offer.
We have also found that providing follow-on support with basic planning and savings tools, such as an ISA, can lay the foundations for good savings habits and for healthy financial management in the future. In turn, this hand-holding can lead to a more trusting employee/employer relationship and a better appreciation of the company and how its company benefits can best support them.
Above all, it’s important to avoid the temptation to blast out financial information before connecting with employees on an emotional level. The pensions and financial services industry has spent many years taking this approach, with little engagement. HR can do much better.
www.likeminds.uk.com
