Building financial resilience: Tips for supporting employees through life events
In March, Pluxee UK created an article exclusively for REBA, detailing three ways to use your employee assistance programme to better support life events, such as:
- promotion
- marriage
- divorce or separation
- bereavement
- parenthood or adoption
- buying a first home.
The cost-of-living crisis is one such challenge, as is the April 2024 mortgage rate increase, which, in some cases, vastly increases a homeowner’s monthly outgoings.
These economic changes are beyond an employer’s control, but there are ways businesses can help their employees become more financially resilient, lessening the impact of their financial stability.
We define what it means to be financially resilient as having the tools and resources to face any potential financial challenges that may arise in the future.
“Employees don’t leave the stress of poor financial wellbeing at home, and over half (53%) of HR professionals are witnessing the consequences of an increasingly worried workforce.” Money Mastery, Pluxee UK.
Employees with money worries experience greater stress, increased absenteeism and lower workplace engagement and productivity. Every step you take to create financially resilient employees will benefit your business.
Education and Advice
No matter the life event, if your employees have a level of financial know-how, which includes ways to stretch money and plan for the future, they’ll be in a better position to navigate economic changes. As such, the first step in building financial resilience is to educate employees, giving them money management tips at the touch of a button and ensuring they know where to turn when they need advice and guidance.
Employers and HR professionals don’t need to become financial experts or have all the answers. Still, they can direct their employees to expert support if they offer a financial advice service as an employee benefit. Employees can use this guidance for essential support during life events, such as divorce, separation, and bereavement, which are events that can significantly affect their financial situation.
Financial advisors also provide essential information to those embarking on the journey of buying their first home, from helping them navigate the technicalities of the different mortgage policies available to assisting in creating a plan to set money aside to save for a deposit.
Affordability
Affordability is another cornerstone of your financial resilience strategy. The cost-of-living crisis and inflation increase made everyday living more expensive, which impacts your employees’ ability to set money aside. Having savings to fall back on if needed builds financial resilience, and giving employees a chance to save on their essential purchases allows them to create a nest egg for life’s unexpected and planned events.
Pluxee UK highlights the positive impact employee discounts and cashback schemes can have on employee finances in their blog - Essential savings for your employees, whenever, wherever – and explores how you can make your financial resilience sustainable for long-term support.
Debt Consolidation
Nearly one-third (30%) of adults say they’ve struggled to meet mortgage, loan repayments, and monthly rent payments during the cost-of-living crisis.
A poor credit rating can negatively impact an employee’s ability to borrow the funds they need during life events, especially when it comes to being approved for a mortgage. People in debt often fall into the trap of amassing more debt until borrowing becomes a problem. Once debt becomes unmanageable, debt consolidation is one solution, but poor credit rating means limited, high-interest options.
Businesses can provide employees with a safety net, offering them a debt consolidation solution repayable through salary deductions. An employer-funded debt consolidation solution helps employees avoid paying extra in interest, putting them back in control more quickly and experiencing more of what matters in life sooner.
Employees experiencing money worries cost the UK economy £120bn. When you build resilience into your financial wellbeing strategy, you support your employees throughout their lives and create opportunities for your business to thrive.
In partnership with Pluxee UK
Pluxee UK, is a leading employee benefits and engagement partner that opens up a world of opportunities to help people enjoy more of what really matters in their lives.
