5 ways to support employees’ financial wellbeing
Money concerns are one of the biggest causes of stress. PwC’s 2017 ‘Employee financial wellness survey’ found that 53% of employees are stressed about their finances.
Smart companies are recognizing that being financially stable is an acute need for their workers. In fact, in a recent Barclays survey, 38% of employees said that they would move to a company which puts financial wellbeing as a priority.
Importantly, the study also found that 1 in 5 employees want financial guidance from their employer.
Traditionally, the thought of an employer getting involved with workers’ financial concerns would be a HR or People team’s nightmare, but employees are increasingly turning to their place of work for help and guidance.
So, companies which value their people and put them first (we call organizations which do this ‘People Companies’) should think about ways they can support employees in this area.
There’s two things to consider, though, before we look at the ways in which companies can support employees financially.
Firstly, it’s not about the perks – but showing your workforce you care and value them. When we spoke to 3,500 employees across the globe about what really makes them productive, one of the most overwhelming things which stood out was that they valued a great workforce experience (78%) and being valued and recognized (66%) over perks. Consider whether you’re offering just perks – or something that your workforce will really value you providing.
Secondly, if you want to consider ways to support employees’ financial wellbeing, the first thing to do is ask them. Just 12% of employees we spoke to are asked on a regular basis what would improve their experiences at work. Almost half (47%) had never been asked at all.
Once you’ve done that, here’s six things to think about as an employer to support employees’ financial wellbeing.
1. Money management advice
One in five workers said they would value broader financial guidance, debt management and counseling if they were in financial hardship, according to Barclays.
Companies could consider offering money management guidance, debt counseling, and coaching on debt consolidation. If you don’t have the skills in-house to provide this information, there are money management service providers who offer tailored programs aimed at employees.
HR Director at Unum, Liz Young, also suggests introducing employee assistance programmes for those who may need more advanced support. Writing for HR Zone, she says these offer direct, confidential contact with experts who can support individuals with areas causing emotional distress, including money troubles.
2. Salary sacrifice schemes
The rules around salary sacrifice schemes in the UK changed in 2017 meaning things like company cars, work-related training, mobile phones and gym membership could no longer be offered under a salary sacrifice scheme.
However, pension contributions, childcare, cycle-to-work schemes and ultra low-emission vehicles are all valid under the salary sacrifice rules, so don’t overlook offering these tax-friendly incentive schemes to your employees in the UK.
In the US, the fringe benefit tax rules enable employers to offer certain tax-free perks to employees, such as health care, dependent care and educational benefits.
3. Employee discount schemes
There are a range of loyalty and rewards schemes employers can register with to enable employees to receive discounts on goods and services when they shop online through the scheme.
Free or discounted membership to a local warehouse club, like Costco – where people can buy household items in bulk – also provide financial perks for employees.
Remember, though, workers value a great workforce experience over perks like these. So, if you’re considering investing in employee discount schemes, do your research first by asking your people if they’d value support like this or if they’d appreciate you investing elsewhere as an employee in alternative ways to build a better workforce experience for them.
In the UK, the auto enrolment rules mean everyone over the age of 22 in full-time employment earning more than £10,000 a year must be automatically enrolled into a workplace pension. But that doesn’t mean employers can’t go the extra mile and deliver more value around pensions for their employees.
If you want to stand out from the competition, consider offering higher employer contributions than the required minimum each month, and offer pensions advice so that employees, particularly Millennials and Gen Z, understand the benefits of investing in their retirement at an early age.
In the US, two new workplace retirement savings bills are being mooted. The proposed Automatic Retirement Plan Act of 2017 would require the majority of employers to offer a defined contribution pension plan.
Although employer contributions would not be required, as above, this is a key area where you can stand out from the competition in the war for talent by offering a decent retirement plan with employer contributions.
5. Loans and saving schemes
Almost 50% of employees are not putting money aside for anything beyond regular bills, research by the Social Market Foundation and Neyber reveals. The study also shows that one-third of workers have no savings or investments.
Offering a workplace savings plan, like a corporate ISA, can kick-start someone’s saving mentality and help them to build a financial safety net.
Anglian Water offers a loyalty savings scheme to encourage employees to save for the short term, with payments of up to £250 a month coming directly out of pay. The scheme is also linked to the company’s business objectives, which, if met, means employees receive a bonus on top of their saving.
As part of its overall financial wellbeing strategy, Anglian Water has rolled out a loan scheme after trialing it initially with 500 employees. After the pilot ended, 82% said that they valued it and 52% said they would consider using it in the future.
It comes down to providing a great workforce experience
For most people, money equals security and freedom. When people aren’t on top of their finances, it can cause anxiety, stress, insomnia and other wellbeing issues which have a direct impact on someone’s ability to function at their usual capacity at work.
If you’re looking for a differentiator to make your business stand out from the competition in the war on talent, then offering assistance to your employees to be financially secure is one way to do so.
Remember, though, employees value a great workforce experience more than perks – so make sure you’re getting value from support you’re offering in more than the financial sense. If you’re not sure if these are areas workers would value support in, then why not ask them?