Ways employers can support staff with their financial wellbeing at every stage of life
But with all the focus on mental wellbeing, ‘financial wellbeing’ is often off the radar, and can sometimes fall out of this scope. After all, more traditional mental health benefits packages are often prioritised for those with tight budgets, and understandably so. However, if employers truly understood the drastic impact that financial wellbeing can have on both the short and long-term health and performance of employees, they may consider broadening their horizons.
Financial wellbeing, COVID and performance
LV recently conducted research into how habits and general outlook had altered as a result of the pandemic. There are three statistics from their study that should ring in the ear of every UK employer. First, they found that 23% of UK employees expect their financial situation to worsen; secondly that 31% are worrying about money more than usual; while finally 44% believe they are more stressed and anxious as a result.
Just think about this: almost half of your company are likely to be significantly more stressed due to the financial impact and concerns brought about by COVID. Given employees were already stressed about their finances (a Close Brothers study found 77% of UK employees worried about money when they were at work whole 70% of them admitted to wasting a fifth of their time at work as a result), the implications of poor financial wellbeing cannot be underestimated. Addressing financial wellbeing over the short and longer term must now be considered a vital consideration for business success. It could reduce sickness and costs and improve productivity by upwards of 20%.
Educate to reduce financial stress and improve productivity
For employers considering support in the short and medium term, an ongoing financial education programme in the workplace is paramount. Educate staff and highlighting the actions they can take to improve their long-term financial security will not only improve their financial wellness, but it will significantly improve performance and the level of value staff place on their employer. At Lorica, we surveyed every employee we have worked with over the past 18 months, and 100% of respondents said that providing financial education in the workplace was beneficial. In fact it’s so highly valued amongst the UK workforce financial wellness is now considered a key benefit by most.
Tailored support
Given financial stress is vastly different dependent on demographics, and educational workshops and materials should be focused on specific life events and stages. Younger employees should be supported with some more basic steps to help them deal with the continual battle of getting on the property ladder. Conversely, those in their forties and upwards need careful support in structuring for retirement. Pension provisions are extremely low in the UK with the average pension pot at a measly £5,800 a year. Failing to help prepare your employees for retirement has the potential to result in a demotivated workforce and create challenges when looking to exit employees and bring new talent through. It will also reduce the value associated with the pension benefits employers provide.
Improve Pension provisions to increase financial confidence
Another straightforward way employers can improve their employees’ pension provisions (and, in turn, their general wellbeing), is by reviewing their existing pension provider. It’s also important that pensions are easy to use and help employees understand and assess their current situation. Some of the best platforms collate information on the employee’s financial goals and provide a score out of 100, along with action points they can take to improve it. This helps employees focus on what actions they can take today to address what can feel like an overwhelming long-term issue. Any platform also needs to be easy to use and have a full suite of online learning materials to bolster employees’ education. Using and accessing pension should ultimately be an enjoyable process rather than a confusing and restrictive one. Knowing how money employees have and how to improve their pension provisions, is a cornerstone of improving their financial security and reducing any financial anxiety that may rear its head.
Protection and support benefits for your employees
Some considerable thought should also be given to the long-term support employees may need should they be significantly impacted by mental health issues. One in four of the workforce will suffer from a significant mental health condition every year. One in six will experience anxiety or depression in any given week. Poor mental health is also one of the highest causes of absenteeism in the UK (exacerbated by the fact that 70% of those with a diagnosable mental health issue still don’t receive treatment). As a result, lack of good mental health is the top reasons why people claim on income protection policies – typically accounting for anywhere between 30% and 50% of all claims. As such, it’s paramount that the income protection benefit employers provide has mental health as it’s number one focus. Due to the nature of mental health, it’s important for employers to assess the claim statistics of their provider and ensure that a wide variety of mental health conditions are included within the policy. Furthermore, finding a provider that can also deliver added benefits of remote psychological and GP support services is a great option. Use of private remote GP services has increased by 90% in the last 12 months and use of remote psychological services has increased by a rather telling 500%. Supporting employees effectively in this area will help them return to work faster, thus improving your retention rates and ensuring they have all the possible long-term support they may require.
Given the UK has had a mental health crisis bubbling for some time – one which has drastically accelerated by the pandemic – it’s impossible to escape the intrinsic relationship between mental health, financial wellbeing. Companies that fail to provide financial education or improve their pension scheme and mental health benefits could be significantly hampered as they try to transform. Only a few years ago few people had heard of the phrase ‘financial wellbeing’. But now, improving employee’s financial wellbeing is an absolute necessity for all UK employers.
This article is provided by Lorica.
In partnership with Lorica Workplace
Lorica has one simple aim: to help people develop a healthy relationship with money.
