Janet Mckenzie: Why we must address financial wellness
Underneath them all is an aim to move thinking along from a narrow focus on health in isolation, to considering an employee’s state of mind and wellbeing in a more rounded way.
‘Time bomb’
Like all good ideas, it feels like common sense when you break it down.
Take financial wellbeing as an example. No matter where you believe responsibility for financial education and management lies – school, state, employer, individual, provider – one thing is sure, if an employee has financial worries, they are going to struggle to focus on work and it will inevitably have an impact on them and those around them in myriad ways.
One area of particular concern is the ‘pensions’ time bomb’, with its impacts on both employers and individuals.
Currently, retirees may have an element of defined benefit pension – but this is dwindling rapidly. The bald fact is that huge swathes of UK employees do not have adequate savings to fund their retirement.
Auto-enrolment has taken a small step in the right direction, but may have also created a dangerous feeling of security – “I’ve got a pension now so that’s alright”.
Even with the planned contribution increases, many employees are unlikely to have enough saved to live the way they’d like to in retirement.
This is likely to result in employees who (reluctantly) have to stay in work for longer and longer, with all the knock-on challenges that creates.
The Southern Co-operative’s approach
We are early on in our financial wellness journey but are fortunate that we can offer all colleagues access to The Co-operative Credit Union so they have an alternative to higher interest lenders and an incentive to save.
A big plus is also the store discount available to all (double on payday weekends!) and our focus is to help colleagues make the most of their own money.
Removing assumptions
Our first step will be to talk with the leadership team, managers and colleagues throughout the organisation to understand what people want.
And we can’t make blanket assumptions about who might need assistance, or focus on stereotyped groups (for example, the lower paid for debt management, or higher earners for investment advice).
We’re reminding ourselves that everyone can face financial challenges at different stages of their life and career, and we can’t easily predict what they might be.
So we need to think how we as an employer could or should help colleagues manage the costs of getting to work and childcare; budgeting for everyday needs and unexpected bills while trying to save for the future to cover holidays, birthdays, Christmas, mortgages, university fees, or the long-term care of a parent or family member.
The wider area of financial education is one we really need to think about so we can help colleagues to make the right choices with the money they have. The journey begins.
This article is written by Janet Mckenzie, reward and performance manager, The Southern Co-operative
