3 ways to boost financial resilience and support employees through life changes
Financial resilience can wax and wane during an employee’s lifetime. Major life changes and events – like buying a house, caring responsibilities and retirement – can put a strain on their financial situation. And combined with the rising cost-of-living, employees may find it even harder to ride out financial turbulence.
Indeed, as the price of food and energy bills remain relentlessly high, many people are struggling to cover the cost of everyday essentials. Rising interest rates are also driving up borrowing costs and mortgage payments, affecting people’s plans to buy their first home or remortgage.
The ongoing economic pressures could put people’s financial resilience under further threat. Insights from Standard Life’s Retirement Voice 2022 research showed that many were already feeling financially squeezed, with almost half (49%) cutting their spending.
In addition, 58% said they were worried about running out of money – despite taking measures to cut back.
A duty of care
Employers have a duty of care to employees, and it’s important to support them if their financial resilience has been hit by a change in circumstances. This could help improve employees’ overall financial wellbeing too, which could bring business benefits such as increased performance and productivity and reduced absenteeism.
As an employer, you can play a key role in helping strengthen your employees’ financial resilience and supporting them through periods of change and instability.
3 Tips for improving employee financial resilience.
1. Understand employee needs
There’s no one-size-fits-all approach to supporting employees with their financial resilience; every employee is different.
For instance, employees’ financial priorities or goals are likely to vary depending on their life stage and financial situation. Some may be focusing on saving for their first home, others may be approaching retirement and getting their pension pots in order. For others, the priority may be to pay off credit cards or loans and get finances into better shape.
Therefore, it’s important to get a solid understanding of what matters most to your employees, so that you can personalise your support offering. You could start by normalising conversations about money in the workplace. This could give employees a safe space to share their financial concerns and goals, and give you an insight into what they need.
Homebuyers, for example, may be worried about saving enough for a deposit or feel confused by the complex home buying process. You can support them by signposting to resources and information that help them feel better prepared for buying their first home.
2. Share easy-to-digest financial content
Findings from Standard Life’s Retirement Voice 2022 research reveal that only 51% of people feel confident in their understanding of financial products. Furthermore, half the population (50%) feel overwhelmed by the amount of information available.
You can help bridge the gap by providing bitesize financial content that’s easy to understand and can help boost employees’ financial confidence. Consider signposting employees to independent resources such as The Money and Pensions Service and MoneyHelper. These are designed to provide impartial guidance for a range of financial circumstances, from everyday budgeting to help tackling debt.
3. Highlight the importance of planning
Planning can make a big difference to how people feel about their finances. According to Standard Life’s report, people that plan are almost three times more positive about their finances than non-planners. In addition, 74% of planners say they’re confident making financial decisions; just 42% of non-planners say the same.
For employees who may be struggling to make ends meet or who are facing a significant life change, planning takes on even greater importance. Financial upheaval – for whatever reason – can be incredibly distressing, so it can be helpful for employees to have an emergency fund or plan in place to help strengthen their financial resilience.
You can support employees by highlighting the importance of planning and providing resources to help them put one together. A good place to start is to create an internal communications campaign that emphasises the benefits of being prepared and having a safety net for the unexpected.
Include useful information such as how to set up a budget, tips on saving for an emergency fund, and where to turn to for support.
For more information on financial wellbeing, including resources on how you can help support your employees, take a look at Standard Life’s Financial Wellbeing hub.
Supplied by REBA Associate Member, Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.
