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23 Jan 2017

6 ways to improve the financial health of your staff

There is a growing body of evidence that shows employers are paying a heavy price for employees’ poor financial wellbeing. 

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According to research by the CIPD in 2016, 19% of employees have lost sleep worrying about their finances, and according to our recent research Financial Wellbeing: The Employee View, one in four workers admit that money worries affect their ability to do their job.

Committing to support your staff’s financial wellbeing is about more than simply providing reasonable pay and benefits (although those are, of course, vitally important). 

It’s also about how pay and benefits are communicated, ensuring that employees feel valued, giving appropriate support with budgeting, debt management, long term savings and retirement planning, as well as providing access to regulated financial advice where relevant.

This doesn’t have to be an arduous or expensive undertaking. Taking the first steps towards improving the financial health of your staff can be a series of small projects that build on work which may already be going on in your organisation. 

Some key tips are:

1) Look at the characteristics of your workforce (but don’t stereotype them)

Most organisations are already sitting on plenty of data that can help them to understand potential issues faced by their staff, and also to benchmark existing practices. 

Good places to start are attitude/engagement surveys about pay and benefits. HR systems also often hold a wealth of details about whether staff have taken maternity/paternity leave, their overtime patterns and pay and bonuses. Third-party sources such as aggregated data from an Employee Assistance Programme can also be a useful starting point for deciding what action to take.

All of that information can help you to build a picture of different groups within your workforce – based on age, earnings, life-stage or other factors. However, it’s important to be aware that individuals will have different experiences – not everyone with caring responsibilities will be in their 40s and 50s – and student debts are not just the domain of the under-30s.

2) Review what you already offer

Could you supplement existing benefits and communications with easy to implement opportunities, such as access to budgeting help for low earners or savings and investment ideas for higher paid staff? 

Carrying out a gap analysis between what you currently offer and what your workforce may need can help with understanding the priorities.

3) Create a business case

Like most workplace initiatives, financial well-being works best when there’s buy-in from the top, and that means creating a strong business case. Quantifying the effect that lower productivity and higher absence rates have on corporate performance is a robust starting point for building the business case. 

Other effects include poor job performance and decision-making, further impacting a company’s ability to function at its best.

4) Start small

That business case doesn’t have to encompass a huge suite of activities. It could focus on one particular aim, such as promoting better take-up of a particular benefit, revising communications or reviewing policies around pay and benefits. Provided the effectiveness of that one activity can be measured and quantified, it can then act as the starting point for subsequent work. 

5) Measure and evaluate

It is essential to be able to assess the effectiveness of any wellbeing activity – and financial wellbeing is no different.  According to the CIPD’s 2016 Absence Management survey, only 17% of organisations that spend on employee wellbeing evaluate the impact of what they spend. But this is by far the best means of paving the way for additional spend or continued support of the policy.

To do that means setting clear, measurable goals and a benchmark against which change can be measured. Making sure that those goals are evaluated thoroughly, in terms of all the costs and benefits – is also vital.  

6) Don’t be deterred by risk and liability

Some employers have concerns around providing financial information and education for staff, in case this makes them liable for employees’ decisions in the future.  Offering access to information packs, sources of financial education – and access to regulated financial advice from a third party - carry no liability.

Many employers that support employee financial wellbeing view it not as a risk at all, but simply as the right thing to do.

Click here to download the report

This article was provided by Close Brothers.

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In partnership with Close Brothers

Close Brothers has been providing financial education services to employees of some of the UK's best known organisations for over 50 years.

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