23 Jul 2018

How to improve financial wellbeing without pay rises

Every employee loves a pay rise and why wouldn’t they? A little extra money is always welcome – it helps with both the bills and motivation, reassuring staff they are doing a job that is being positively recognised. In a world where many are struggling with day-to-day living costs or battling with debt, it can also improve financial wellbeing and boost productivity since employees are able to better focus on their job rather than worrying about money.

However, as every reward manager who has lost a battle with their finance director knows, sometimes pay rises simply aren’t an option. So what can be done? Employers aren’t magicians and can’t simply magic more money out of a hat – or can they?

In reality there are a number of key initiatives that employers can look at that will deliver at least some of the extra cash that employees are after – and therefore improve their financial wellbeing – without increasing the wage bill for the employer.

Four tricks to magic more money out of the hat:

1. Help staff reduce outgoings spent paying off debt

Naturally employees would love it if it was possible to magic away their debt. It would improve financial wellness, reduce stress and mean they have more money for other things. Sadly it’s not possible. But where employers can assist is in helping them to better manage it.

Could employees consolidate credit cards into a loan or onto an interest-free card? That could make a big impact on the debt they are trying to clear. When it comes to mortgages – often the biggest debt they have – are they on the right product or are they paying more than they need to? Would a mortgage review help?

2. Make existing pay go further

As well as spending less on debt, employers can also ensure their staff have more money in their pockets each month simply by making their existing wages go further. There are a whole plethora benefits available that employers can offer to help customers save money on things they already spend their pay on – from childcare vouchers to discounted gym memberships or cycle to work schemes. Even if employers don’t offer these, promoting the range of discount code sites available can help employee’s money go a little further and costs the employer nothing.

3. Releasing capital for one-off investments or purchases

Of course sometimes an employee may be after a pay rise because of something imminent in their life plan – a child heading off to university for example – that their existing monthly pay cheque simply falls short of covering. In this case, helping them to understand how and where they can release capital can help to relieve the strain and provide the extra finances they are after.

4. Offer free financial education and advice

The idea of financial education and advice is one that employers often veer away from – especially since they can worry they will bear the brunt of any negative repercussions from such advice. And yet financial education and advice can have one of the biggest impacts of all on the financial wellness of employees.

As we’ve seen above, better education around the options available to employees to help save money will help pay cheques to go further – whether there’s more money in the pot or not. Covering everything from investment decisions to choosing the right mortgage, employees really can benefit positively from providers that will often supply such advice for free.

This article was provided by Charles Cameron.