When it comes to employee wellbeing, financial wellbeing is key.
When talking about good ‘financial wellbeing’ we mean a state someone is in when they have control over their financial lives. As such, financial wellbeing is intrinsically linked to financial resilience and the ability to comfortably manage one’s finances.
More specifically, being able to manage one’s finances means that someone is satisfied with their ability to save, to manage their cost of living, and to make their salary last until the end of the month.
There are some essentials required to enable employees to handle life’s financial ups and downs. For example, having a savings buffer plays a significant role in employees achieving financial peace of mind. Barclays research, Financial Wellbeing, The Last Taboo (published May 2014), showed that if employees have less than three month’s salary savings as a buffer, then they are prone to financial distress. This distress affects their personal life, their work-life as well as their IQ in extreme cases.
Financial concerns affect their mental health because of the constant strain of worrying about their finances. And it is important to note that this distress could have significant effects on an employee’s personal life and relationships as well.
Moreover, this distress often affects their work and livelihood because it has the potential to impact productivity, as well as morale. Under this strain, employees are more likely to be absent and can be prone to unsafe practices at work.
The business benefits of financial wellbeing
The main reason that employers should get involved in offering financial wellbeing tools to staff is simple: it is about treating employees fairly.
If an employer has the capacity, and the platform, to provide a benefit that gives employees a better chance of controlling their finances, and a better chance of becoming financially resilient, then there’s really no excuse not to.
Showing that you care about employee wellbeing not only helps to increase engagement with your employee, bolstering that relationship between that employer and employee, it can also foster increased loyalty.
For organisations looking to boost their employer brand within a given industry, a financial wellbeing solution could also work towards making them more attractive than their competition, and possibly bring down talent acquisition costs.
There can sometimes be an initial aversion to employers getting involved in an employee’s finances. Employers may have an apprehension of coming across as intrusive or Big Brother-ish.
Trust in financial wellbeing benefits is earned as they establish a solid reputation with end users. This ensures that employees are comfortable using and extracting the greatest value from their financial wellbeing offering via any media that is available: mobile, laptop or tablet. And that is the challenge for any employer or provider: how to build trust through a scalable process that combines a simple and user-friendly offering via these media while truly addressing an employee’s needs. It is important to understand that building trust is synonymous with embodying the right combination of credibility, reliability, approachability and, more importantly, a true understanding of a user’s needs.
The process of building trust will differ from provider to provider and varying importance will be placed on each of the factors through adjusting levers tied to the transparency of the value proposition, simplicity of the user interface and the right level of human interaction. It is a process that needs to be tested and should not be taken lightly.
Confidentiality is also a very important factor to both employers and employees, and it is important for employees to understand that their information is only accessible on an anonymised basis. All information that makes it back the employer must be done so on an aggregated and anonymised basis, with the goal of measuring the efficacy of a solution as opposed to monitoring employees’ spending habits.
What the future holds
In the future, we are likely to see more benefits options that can be tailored to employees’ specific needs without the need to provide flexible benefits. Providers will work with the employees themselves to develop products around their requirements, as opposed to pushing products at them.
This will be important as we see the effect of five generations in the workplace and the increased lifespan of workers. Employees nearing retirement will need stability in terms of what finances they are going to need post-retirement. This need differs from that of recent graduates taking on their first job out of college who may need a platform to help them take control of their finances for the first time. It is different again for people in the middle stage of their lives where they may be looking to establish a family or buy a house.
Technology is clearly rapidly changing the benefits game. Already there is an acknowledgement that mobile-first is a gap that needs to be addressed. Across income brackets most people have smartphones but they may or may not have a tablet or laptop. Taking the example of people working on a warehouse floor, they may not have access to a computer at a work site, but they will probably have access to a smartphone.
Financial worries impact us all at one time or another, and organisations can use these simple ideas to work towards creating a happier, and more financially savvy workforce. With so much focus on Financial Wellbeing in the world of employee benefits, organisations must offer information and resources that are useful to all staff.
About Hayley Dolby
Hayley is Communications Executive at Personal Group, a technology enabled employee services business which works with employers to drive productivity though better employee engagement and a more motivated workforce. With over 30 years’ experience, the Company provides employee benefits, serving 550 businesses, reaching over 2 million employees across the UK.