Five tips to help employees to focus on their finances

It’s not uncommon for employees to face financial worries at various stages of their life – whether that is dealing with debt, concerns over retirement savings or making the monthly budget work.

The link between debt, money worries and stress, lower productivity and absenteeism are increasingly recognised by employers, and many are now looking for ways to support their employees.

The best way to achieve this is by integrating a financial wellbeing strategy that provides employees with the knowledge to make informed financial decisions. Not only can this help employees feel financially secure, but it can also drive improvements in employee engagement, productivity and retention.

This may seem like a mammoth task, so here are our top tips to help.

1. Research your employees’ needs

Firstly, it’s important to understand the individual needs of your employees. Some will be looking to buy their first home, whereas others are preparing for retirement.

The key is undertaking both quantitative and qualitative research. For example, a good place to start is to look at the benefits on offer and the take-up rates. Are certain benefits popular for certain cohorts of employees or perhaps some benefits have poor take-up across all employees?

Poor take-up could be because the benefit isn’t attractive to the workforce so should be replaced with something more appealing, or it could be that employees don’t understand the benefit and how it could help them. Recent research studies conducted with employees show that there is often a big difference between what reward departments believe employees understand and the reality.

2. Develop an appealing savings package

Start by thinking about what savings vehicles are suitable for each employee cohort. It can help to look at it from a short, medium and long-term savings view:

Short term – this normally has a time horizon of less than five years and may include areas such as saving for a car, holiday, wedding or possibly a deposit on a first home. Cash ISAs, LISAs or share scheme such as Save as You Earn are often used for these purposes.
Medium term – this normally has a time horizon of more than five years and may be used for saving for school fees, moving house or other larger purchases. Equity ISAs or savings vehicles such as a Share Incentive Plans may be useful.
Long-term – traditionally the pension, as a core part of retirement income planning.

3. Empower employees with financial education

The next step is providing employees with tailored financial education to aid understanding around various financial issues and how the financial benefits on offer in the workplace can help. The key is to offer a range of topics from flex windows and general money management through to more specific areas such as share scheme launches and maturity and retirement planning.

4. Maximise employee engagement

Any financial education should be interactive and engaging, aiming to create deep and lasting understanding; the most effective way to do this is through face-to-face seminars or one-to-one sessions. However, this may not always be possible, so online education formats which include digital nudges, webinars, webcasts, animation and tailored company-specific interactive microsites can also offer an effective method of communication.

5. Bring in a provider

Many employers are unable to offer this support themselves, hence the need for specialist financial wellbeing service providers. They should be able to help you to develop a financial wellbeing strategy that is tailored to your company and employees.

The author is Jonathan Watts-Lay, director, WEALTH at work.

This article was provided by WEALTH at work.