REBA essential insights: six ways to create a culture change to make financial wellbeing a success

Nowadays, leadership teams implement corporate governance processes to deal with sensitive issues like gender and ethnic diversity. Concerted efforts are made to improve this part of an organisation’s culture and performance, and it’s time to similarly address financial wellbeing.

Many in senior leadership roles are unaware just how much stress and anxiety their employees experience in relation to money. Many leadership surveys put personal money issues much further down the list of employee challenges than the same employees say in staff surveys. There is now an enormous body of research which shows money is one of, if not the biggest, cause of worry and anxiety for many people. For example, Barclays’ Financial Wellbeing: The Last Taboo of the Workplace? (2014) survey, analysing insights from 2,000 respondents, demonstrated that: 46 per cent of employees worry about their finances; only 35 per cent feel positive about their financial future; and 18 per cent lose sleep at night due to financial concerns

Integrating financial wellbeing

Senior leadership teams need to view the financial wellbeing of their employees in the same light as mental wellbeing. This means integrating financial wellbeing into all management decisions and the caused championed throughout the organisation. This needs several things to happen to become a reality:

An acceptance by senior leadership of the importance of financial wellbeing to their workforce, both for commercial and ethical reasons.
Financial wellbeing to be included as a separate agenda item at each senior leadership meeting.
Financial wellbeing strategy developed and overseen by a dedicated senior executive in the leadership team, who takes responsibility for championing the cause and monitoring progress and results.
Ensure that managers of pensions, reward, share schemes, occupational health and other support services work together, and with the senior leadership financial wellbeing lead, to develop the company’s financial wellbeing strategy.
Integrate financial wellbeing material and messages into ongoing staff communication activity.
Partner with an outside financial wellbeing company, that can help deliver educational content, communication material, live events and suitable financial solutions.

Each company and their workforce are different and there is no magic one-size-fits-all approach. But taking a long-term view, starting small and being consistent in your approach to financial wellbeing is the best way to get started.

Addressing challenges

Some business leaders may feel that helping staff to develop positive and effective money attitudes, skills and habits would be straying too much into employees’ personal lives. Their view is that adults can and should be free to make their own financial choices and accept the consequences, just like with other lifestyle issues such as diet and exercise.

Such opinions are at best naive and at worst negligent. Employee salary and benefits are usually a significant cost in most businesses – estimates put the average employee cost at £30,000 per annum in the UK – not to mention the time and money spent recruiting and training staff. On top of that, maximising staff productivity and minimising staff attrition will be a key priority for senior managers. Any business that thinks it’s good business to let its staff flounder and fail with personal money issues is just increasing the chances that it will underperform as a business. You invest a lot in employing people, so anything that helps them be their best is a no brainer. Particularly if it can be done at minimal effort or cost to the business.

Some managers are under the misapprehension that helping employees improve their financial wellbeing will lead them into giving, or being perceived as giving, personal financial advice. Providing employees with access to generic financial wellbeing support and related solutions actually means that employers can demonstrate that they are not providing regulated advice.

Putting the employee first

Everyone manages their money differently, and employees of course have the right to spend their income however they please. However, in my experience, helping employees to understand how to control their spending, so they can move from being a borrower to a saver, is the foundation upon which everything else is built.

There’s also a massive amount of expensive unsecured debt in the UK, and helping people lower the cost of this debt, repay it quickly and avoid taking it on in the future, is an essential and tangible element of a successful financial wellbeing strategy. Offering salary-deductible lower cost loans and savings from payroll, ensures that the workplace plays an active and comprehensive role in ensuring its employees’ financial wellbeing.

Having a progressive financial wellness policy isn't straying beyond what a good employer should do – they already provide many financial benefits and services – but more about improving the context in which employees see, value and choose those financial benefits.

Sponsorship from leadership is fundamental to success. A financial wellbeing strategy is no long a nice to have – the implications of failing to address this employee need will affect every strand of your business.

The author is Jason Butler, financial wellbeing expert, Salary Finance.

This article was provided by Salary Finance.