Expert view: Jonathan Watts-Lay on matching financial wellbeing strategy with employee needs
This year’s Financial Wellbeing Research clearly shows that employers are linking financial wellbeing to other HR and business objectives, such as building a sustainable and resilient workforce, improving productivity, attracting talent and retaining employees.
However, it is quite worrying that more than three-quarters of employers think a barrier to improving financial wellbeing support is employees not knowing where to start when asking for help; that almost three-quarters believe that their support is not joined up; and that more than two-fifths say that their existing support is unsuitable for employee needs.
Risks to employee financial wellbeing
Although receding, many employers still consider the cost of living as a threat to financial wellbeing, as well as insufficient retirement savings and lack of financial literacy. The mental wellbeing of the workforce is also high on the agenda for employers.
It is well known that when employees do not fully understand their finances or how to address current difficulties, it can result in stress. A lack of understanding of finances can also result in poor decision-making. Helping employees to understand the key financial issues that relate to them is an effective way of overcoming these risks.
But it is really important that any financial wellbeing provision is suitable and effective for the workforce and that employees know how to access it. As people often struggle with their finances, they need support to manage their day-to-day needs, which should be balanced around longer-term needs – for example, the provision of savings through workplace ISAs, as well as pension savings and preparing for retirement.
The future of financial wellbeing provision
To combat these concerns, it is good to see that almost half of employers plan to make changes to their financial wellbeing offerings in the next two years, with many now focusing on helping employees by providing them with tools to better manage their money through offering financial education, one-to-one guidance and advice. Support is also growing for savings products, such as Workplace ISAs, to help employees build financial resilience.
Although the cost-of-living challenges in recent years may have caused employers to be reactive to financial wellbeing support, now is the time to bring it all together in a more joined-up approach.
Offering a financial wellbeing programme will help employees feel financially secure, whether they are a new parent managing childcare costs, saving for a first home, or planning for retirement. And, ultimately, this can help employees become more financially resilient, which is a win for employers, too.
In partnership with WEALTH at work
WEALTH at work is a leading financial wellbeing and retirement specialist - helping those in the workplace to improve their financial future.
