3 ways a financial wellbeing strategy can benefit employers

Financial wellbeing support can go a long way to helping employees feel better about their finances and have a positive impact on employers too

People’s financial wellbeing appears to be at a low point, according to Standard Life’s Retirement Voice 2022 report. The research, which asked almost 6,000 people from across the UK their views on retirement, revealed that many people lack confidence and knowledge to make financial decisions, and are cutting everyday spending because of rising costs.

People are also worrying that they’re not saving enough for retirement, a finding that’s mirrored by Phoenix Insights in its report Great Expectations: Are people’s retirement income expectations adequate and achievable?

As part of Phoenix Group, Standard Life has access to this research through the Phoenix Insights think tank. Using financial modelling, Phoenix Insights suggest that many pension savers are falling short of their financial goals. In fact, around 14 million people who save into a defined contribution pension scheme are not on track for the retirement income they expect.

Financial wellbeing can affect people at work

Poor financial wellbeing doesn’t just affect people at home – if affects them at work too. In its report, Employee financial wellbeing: A practical guide, The Chartered Institute of Personnel and Development (CIPD) found that 28% of employees say money worries have affected their work performance, including their ability to concentrate and make decisions, while 29% say cost-of-living-related concerns have affected their productivity.

However, Standard Life’s research highlights that planning and seeking guidance play an important part in improving financial wellbeing. Those who spend time planning are more likely to feel:

Positive about their financial situation
Confident making financial decisions
Comfortable in their understanding of financial products

Employers can play a key role in helping staff improve their financial wellbeing. And having a financial wellbeing strategy in place can have a positive impact on the wider business too.

3 ways a financial wellbeing strategy can benefit employers.

1. Reduce absenteeism

Financial worries are a big source of stress and can have a knock-on effect on employee attendance. According to The CIPD’s report, an average of 4.9 worker days each are lost each year as a result of financial worries. In addition, financial-related absenteeism costs large organisations an average of £323,390 a year.

By implementing financial wellbeing solutions – such as targeted support and guidance – employers can help employees with any short- and medium-term financial challenges and pave the way for a more secure future. This could help ease the stresses that can affect employees’ mental and physical health and, in turn, reduce absenteeism.

2. Boost employee performance

If employees are finding it hard to concentrate or make decisions because they’re feeling overwhelmed by financial worries – as the CIPD’s report reveals – then it’s likely to affect their performance and productivity at work.

Whether someone is struggling with debt, buying a first home, or approaching retirement and worried about their future finances, a financial wellbeing strategy can help them navigate the challenges they’re facing. Employers can direct them to tailored content and tools relevant to their circumstances, helping to boost their understanding of their options.

Being better informed can help reduce stress, improve financial confidence and give employees the breathing space they need from financial worry to be more productive at work.

3. Improves staff retention and acquisition

Financial wellbeing affects everyone at multiple life stages. And whether your employees are just starting out in their career or thinking about winding down for retirement, supporting them through life’s financial changes demonstrates a duty of care – which can have a big impact on your recruitment and retention.

Indeed, research by PwC shows that over three-quarters of employees who are stressed about their finances would be attracted to another company that cares more about their financial wellbeing.

Financial wellbeing: the right thing to do

Helping employees and supporting them with financial wellbeing is a good thing to do. The best employers show a duty of care towards their staff. And staff that feel supported are more likely to be less stressed, more productive and stay with the company for longer.

With rising costs continuing to squeeze people’s finances, now is a good time to check that your financial wellbeing strategy delivers the support your staff need. If you’re looking to create a financial wellbeing strategy, or to boost your existing offering, Standard Life has some useful financial wellbeing articles that could help you get started.