How to look after the financial wellbeing of your employees and why it matters
Updated 15th October 2022
Financial difficulties can seriously impact both wellbeing and productivity. Anyone who’s ever had to live paycheck-to-paycheck can tell you firsthand how stressful it is. And 2022 has been characterised by eye-watering cost-of-living increases across the board. Knowing how to support financial wellbeing in your employee base has never been more important.
In 2021, findings from a CIPD survey of over 450 employers found that more than half still don’t have a formal financial wellbeing policy in place. And that’s despite the ongoing impact of the pandemic threatening the financial stability of many working professionals. To make matters worse, just 12% of employers have implemented (or plan to introduce) financial wellbeing policies in direct response to the impact of COVID.
Apparently, a third of employers rated these policies as a top priority. And yet, the most common reason that employers cited for not having one was that it wasn’t deemed a priority by senior management. This is despite the fact that supporting employee wellbeing is a huge part of their duty of care. Recent events have only made it more vital that we support employee wellbeing in the workplace.
These shortcomings were bad enough off the back of a year of lockdown and financial uncertainty. But now, UK households are facing huge cost-of-living increases. Inflation has been floating around ten percent. And the price caps on gas and electricity has shot up twice, first by 54%, and then by another 80%. Now, more than ever, employees have a responsibility to support the financial wellbeing of their employees.
Today, we’re going over some practical tips for how to support financial wellbeing in your organisation. Remember, whether you’re a CEO, team leader, or HR director or even an employee with a voice, you have the power to affect workplace culture.
Why you need to implement a workplace financial wellbeing policy
You're here to learn how to support financial wellbeing in your business. But first, you need to know why it’s so important. We talk a lot about the duty of care managers have to their employees. Unfortunately, however, discussions about financial stability can be overshadowed by the conversations around mental and physical health.
That isn’t to say these things aren’t important. But money troubles are unyielding. They can affect every other form of wellbeing, and literally put people out of house and home.
The responsibilities of the business
It’s the duty of any business to reward staff members fairly for their contributions. You can't expect high levels of productivity while disregarding the financial wellbeing of their employees. If you're incompetent enough to do that, you're setting themselves up for mass burnout and high rates of turnover. It’s generally accepted that employees produce more value than they take home. This enables their employer can turn a profit, but businesses still have an ethical obligation to pay them fairly.
The responsibilities of managers
If you’re managing a team, then you need to be able to spot the signs of poor wellbeing in your employees. That said, employees aren’t obliged to tell you anything about their personal life. The best way to monitor employee wellbeing is by checking in regularly to build a good dialogue. Depending on the business, it may also be your responsibility to make sure employees get the hours they’re entitled to.
The responsibilities of HR
HR play a key role in providing financial support for staff. Firstly, they’re responsible for payroll. Secondly, HR must work with senior leadership to develop a suitable financial wellbeing policy for employees. Thirdly, they’re responsible for implementing the policy, and ensuring it’s accessible to every employee in the business.
Practical tips for how to support financial wellbeing
By now, we’ve hopefully made a case for why supporting the financial wellbeing of employees is in your best interests. As for the actual question of how to support financial wellbeing, we think these tips are a good starting point:
Your policy must help everyone
Try not to generalise when you’re drafting your workplace financial wellbeing policy. It needs to be both accessible and useful to every individual in your organisation. If you work in, say, a law firm, it’s not enough for your policy to benefit associates and partners with already comfortable salaries. It needs to help the paralegals, the receptionists, the HR professionals, and all the other support staff.
Provide educational resources for finance management
Investing in employee education should already be one of your top priorities. Making sure your employees have access to sound financial advice and educational resources, like up-to-date lists of competitive utility providers, can really make a difference in their lives if they’re struggling financially.
Offer finance-friendly perks
While they’re by no means a substitute for fair compensation and good hours, some benefits can make it easier for employees to manage their finances. Letting employees choose how often they get paid, or providing Wagestream access. There are also employee discount schemes you can register with to make things like clothes or groceries more affordable.
Make your minimum wage a real living wage
Regarding how to support financial wellbeing in a cost-of-living crisis, we could talk about the indirect approaches all day. But when you get right down to it, there's no substitute for paying your people decent salaries. You might save money in the short-term by sticking to the minimum wage, but evidence shows that the legal minimum doesn’t equate to a real living wage.
When employees struggle to even live payday-to-payday, that stress directly affects their ability to be healthy and productive. Your employees stand to be much more productive if they aren't spending their downtime worrying about keeping the lights on. Funny how that works, isn't it?
Offer secure hours
Zero-hour contracts have long been a subject of controversy, and for good reason. Providing a fixed minimum of hours provides stability like little else, because your employees know how much they’ll be making. If you can’t provide the hours people need, they’ll be forced to look for work elsewhere.
Provide options for flexibility
These days, a lot of people work multiple jobs, and juggling the demands of separate employers can be a complicated dance. Other people have out-of-work commitments, like children or other vulnerable relatives. Whether it’s job-sharing, a condensed work week, or core hours, flexibility options help you make successful careers accessible to a much wider range of people.
Support employee pensions
Pension reliability isn’t what it used to be. And people who’ve been unable to work run the risk of not saving enough before retirement. Going beyond minimal employer contributions is a good way to support employees, and prove to your staff that you want them for the long haul.
The question of how to support financial wellbeing doesn’t necessarily have one universal answer. Much like the people within them, each business and every workplace culture are unique. Ultimately, what employees need from a financial wellbeing policy varies. Gauging and analysing employee sentiment during the development stage is the key to securing buy-in and making sure your employees take advantage of all the resources on offer. So, check in with the people in your business and find out what they would like.