7 ways to link reward strategy with financial education

To help workforces through the strain of an economic downturn, linking financial education and reward strategy needs to be a priority

The Money and Pensions Service defines financial wellbeing as “feeling secure and in control of your finances, both now and in the future”.

But how many of your colleagues would claim that level of serenity regarding their financial situations today?

Not many, according to the latest figures from the Office for National Statistics (ONS), which suggests that around one-fifth of UK adults are being forced to borrow to make ends meet.

For employers keen to take steps to help their workforces through the strain of an economic downturn, financial education and strategy needs to be a priority.

Here are seven ways to provide the support your colleagues need by linking your reward strategy with financial education and guidance.

1. Encourage an “open door” policy

A general unwillingness to discuss money – and particularly money problems – is one of the main barriers to generating better financial wellbeing across your organisation.

Normalising financial conversations and training managers to be open to discussions with team members who are feeling the strain is therefore a vital cornerstone of any attempt to improve overall financial wellbeing.

2. Develop an inclusive EAP

Financial education provision is woefully inadequate in the UK. But employers are well placed to provide the missing link in this sphere.

At EQ, we believe a comprehensive education solution backed up by a 24/7 employee assistance programme (EAP) is a great way to both educate colleagues about their finances and allow them to access support, such as debt advice, when they need it.

EAPs are also handy for signposting appropriate external support services, such as the government’s Money Helper website, for those in need, as well as providing online counselling services.

3. Offer flexibility and simplicity

Flexible benefits plans give employees more control over their benefits, allowing you to better meet individual requirements.

However, it’s important to keep an eye on complexity to ensure your package doesn’t become opaque and hard to understand. That’s one of the main reasons why we advocate developing a central Reward hub that blends information, education, tools, services and benefits.

4. Don’t go into information overload

While workers need information to help them make the right decisions about their benefits packages, too much information can result in them disengaging and missing out on valuable support.

So don’t miss out on the opportunity to gather and use employee data to work out when and how to tell colleagues about the different benefits available to them.

5. Offer employee discounts

When times are hard, employee discounts that help people to save money on a day-to-day basis are hard to beat.

Food, insurance and utilities tend to be the three big hitters in this area, so make sure your discount programme includes offers that help your workforce to cope with some of the hardest price hikes they are having to swallow at the moment.

As with all benefits, these discounts should be made easily available via user-friendly technology and highlighted by communications that ensure all those who can benefit are aware of the deals on offer.

6. Champion small changes

While going without a daily coffee shop beverage won’t allow you to get on the housing ladder by next year, small changes can make a big difference to being able to keep up to date with your household bills.

The key to convincing people to start taking such steps is to demonstrate how much they can save. Cheery regular “nudges”, such as sharing employees’ packed lunch recipes or walking/cycling routes to work, are one way to do this without making people feel they are being ordered around.

7. Consider an early wage access scheme

Usually offered via an app, early wage access schemes allow workers to request a salary (or overtime) advance. The money taken is then deducted from the employee’s pay prior to it being transferred as part of the payroll run.

It’s a service that can help employees to manage their finances, cover unforeseen costs, and avoid having to turn to more expensive sources of credit, such as payday loans.

However, it works best for employees with the opportunity to earn overtime to push their end-of-month pay packet back up again. Otherwise, it’s just another form of debt for people to have to manage.