25 Sep 2017

Feel the fear and do financial wellbeing anyway - 4 tips for getting started

"The secret to handling fear is to move yourself from a place of pain to a place of power. The fact that you have the fear then stops being a problem."

So said Susan Jeffers in her enduring 1991 self-help book Feel the Fear and Do It Anyway.

When it comes to financial wellbeing, there can be a 'fear factor' both for employers and for employees, especially when you are introducing financial wellbeing for the first time.

Personal finances are often a sensitive topic for employees, particularly if they are struggling with debt that they would prefer their employer didn't know about. It can also feel uncomfortable for some employers, unused to blurring the boundaries between staff's work and home life.

But, as the title says, feel the fear and do it anyway. Here are four ways in which employers and employees can move from a place of pain to a place of power when it comes to financial education - and how to get there.

1) Place of pain: "This is extra cost with no benefit for us"

Place of power: Money worries are having a material effect on employees' health. Health provider Cigna's recent 360° Well-being Survey* found that half of the 14,000 employees it surveyed are worried about their finances, to the extent where it is affecting their health.

The bigger-picture impact of that is that the UK has fallen down Cigna's international wellbeing rankings. In 2015, the UK was third out of 12 countries; now it is eighth.

No-one can perform at their best when they lack sleep and are worrying about money. Supporting the financial wellbeing of your staff is about more than simply helping them to get their personal finance house in order. It is also about improving employees' overall wellbeing, which in turn drives lower absenteeism and better productivity at work.

Businesses are beginning to realise this. Close Brother's most recent Business Barometer showed that 49% of the 1,000 senior managers worry about their employees' financial wellbeing, and 66% believe that financial education is essential for all employees.

Place to start: The best way to show that financial wellbeing really is delivering for the business is to benchmark the effect it is having. That could be through comparing sickness absence rates, measuring increases in productivity, or driving improvements in staff engagement. Starting small - with a clearly defined campaign, or with a particular segment of the workforce - can also help to build the business case for future work.

2) Place of pain: "If something goes wrong, we will be liable further down the line"

Place of power: When it comes to making major financial decisions - particularly at retirement - people need help. Taking out an annuity or making the decision to move into flexible drawdown could affect an individual's finances for the rest of their life.

Getting those choices right not only ensures that staff are confident in their ability to retire, but also that they are making best use of the sizeable contributions that employers make into staff pension. In those instances, not doing anything to help staff could be is the greatest risk of all.

In the first five months of 2017 alone, individuals lost over £5m in pension scams. And, since the freedom and choice reforms were introduced, over £43m has been lost. Access to good quality advice and financial education is now more critical than ever.

Financial education and information are not the same as regulated financial advice. Only financial advice has any liability attached, and that lies with the provider (a financial adviser, who must be qualified to provide that advice), not with the employer who offers access to it.

Place to start: If nothing else, provide staff who are approaching retirement with information about free services such as Pension Wise so that they can start to research retirement choices for themselves.

Better still, consider adding broader financial wellbeing to your benefits, at the very least to help those approaching retirement to make good quality decisions.

3) Place of pain: "Employees won't take it up - there are far more exciting options in our flex offering"

Place of power: Financial education and wellbeing may not always be the easiest sell. But there are points in an individual's career where they themselves will know that they want or need support. These could include when a new employee joins the organisation, especially in a first job, or when they are approaching retirement. Promoting financial wellbeing at relevant points can make a real difference in helping staff to engage with it.

Even if there isn't a specific need in an employee's life, they may still want to improve their financial wellbeing. 'Real pay' - pay rises adjusted to take account of inflation - fell by 0.5% in the three months to July 2017, following a 0.6% fall in the three months running up to April this year. Staff will now be feeling the financial squeeze more than ever.

Place to start: Make financial wellbeing a part of your induction and retirement process as a first step, and think about other points in individuals' lives when their interest in, or concern for, greater financial wellbeing will be at its highest, such as after the birth of a child.

4) Place of pain: "I'm an employee with money worries - I don't know where or how to start helping myself"

Place of power: Financial wellbeing isn't necessarily just about saving more and spending less - it's about feeling in control of your finances and being able to make informed decisions about money. Making the first step to wrest back control can make a real difference both financially and in terms of workplace productivity.

Place to start: Staff may not want their employer to know that they are struggling, so creating a financial wellbeing programme that lets employees receive and act on information in a variety of different ways is important. That could be a blend of online help and information, plus face-to-face support where relevant.

Equally vital is building a culture where employees feel supported and able to approach their line manager if they have a problem. Then, it's about training line managers to make sure they can direct individuals towards the relevant support and benefits within a wellbeing strategy.

Whatever your organisation's place of financial wellbeing pain - whether it's lower-paid staff suffering with debt, or more senior staff breaching the pensions lifetime allowance - find a place to start and do it anyway.

This article was provided by Close Brothers.