ABB’s Tobias Simons looks at how to react to growing financial wellbeing challenges
Employee financial wellbeing has become a hot topic with employers, according to a poll conducted at REBA’s recent webinar Evolving financial wellbeing: money trends that are changing strategies.
At the webinar, supported by Close Brothers, attendees were polled on whether financial wellbeing had changed in importance at their organisation in the past year.
- 43% said it has become significantly more important
- 49% said it has become slightly more important
- 7% said it had not changed, but it has always been important
- 1% said it had not changed and it has not been important
- 0% said it has become less important
Respondents confirmed that financial wellbeing was an important issue, with only 1% saying it was unimportant.
The Covid-19 legacy
In a similar way to how the Covid-19 pandemic and lockdowns highlighted the need for better mental health and wellbeing support, recent economic challenges have made employers think more about providing financial wellbeing support.
“The cost of living increase and the rate of inflation have affected employees a lot,” said Simons, who took part in the webinar. “It’s highlighted [financial wellbeing] in the same way that we looked at mental health and wellbeing as an outcome of the Covid-19 pandemic, when many of our employees were going into lockdown or moving to different ways of working.
“With the recent rise in the cost of living, and people’s worries about that, it’s prudent of us to start thinking about how we can support financial wellbeing in the same way.”
Employees shouldn’t only get help with dealing with financial issues once they are in difficulty. It should be an ongoing education process that means they are equipped with the skills for when they need them.
While it’s not as simple as following inflation when setting salary budgets, a step that can be taken to help the workforce is making sure that everyone is aware of the benefits available to them, he said.
“One of the things that I realise about our organisation,” Simons said, “is that there are many peripheral benefits that people do not make good use of, or they are not aware of, which could actually be quite prudent at this point in time.”
He said employers must help people understand how to maximise what income they have, providing education about pensions, contributions, salary sacrifice, tax-efficient savings, etc.
“What we need to do is help people feel better in control of their money or their financial situation,” said Simons. “And that goes back to the mental wellbeing efforts, because, as we know, financial worries are one of the key leaders of stress. And stress itself is one of the key indicators affecting mental wellbeing.
“So, feeling in control of the situation, knowing what you have and how you can potentially maximise on that gives people a sense of wellbeing from a financial perspective.”