How to help employees build financial resilience
The cost-of-living crisis is propelling financial wellbeing onto the corporate agenda in the same way that Covid-19 did for mental wellbeing.
According to a recent survey from Group Risk Development, the industry body for the group risk protection sector, nine in 10 (92%) employers are concerned about how the cost-of-living crisis is affecting their employees.
The Mental Health Foundation last year highlighted that the UK population is experiencing widespread levels of stress, anxiety and hopelessness in response to financial concerns.
To further highlight this point, The government’s Financial Capability Strategy for the UK revealed that one in four workers have lost sleep over money worries and more than half say that current financial worries affect their work performance.
This means that supporting financial wellbeing isn’t just a ‘nice to have’ or just about rewarding employees, it is about driving business productivity and sustainability.
What can employers do to support workers and improve their financial resilience?
Money is something we all need, and so, in theory, should be an easy subject for employers to offer support for. However, we live in a society where finances are seen as private and not to be discussed and so it can be hard to break the taboo and engage employees about their finances.
Employees may not feel willing or able to tell managers about financial troubles because they are embarrassed or ashamed. So what can employers do?
1. Don’t jump to conclusions
It is important to consider the specific needs of different generations of employees and target communications, support and programmes accordingly. Some employees will be managing budgets for the first time or saving for their first house, while others will be gearing up for retirement and focused on ensuring they will have enough in their pension pot for a decent standard of living. Every individual employee will have different circumstances and lifestyles, so assuming the level of support an employee needs can result in those who truly need it missing out.
2. Start the conversation
One way for companies to promote financial education and wellbeing in general and start to build employees’ financial resilience is by becoming a trusted voice and informing good financial habits. Communications designed to break the wall of silence around financial wellbeing and provide opportunities for employees to talk and learn about it are key to early success.
3. Become the trusted voice
Addressing common myths or press coverage of the issues surrounding financial wellbeing are equally important. Last year, for example, there were several articles focused on employees wanting to stop their pension payments during this cost of living crisis. Fortunately, this hasn’t happened in large numbers. Part of the reason is because some employers started to communicate the importance of long-term savings and pensions.
Helping people understand that a knee-jerk reaction could have a detrimental impact on their retirement helped prevent this. Employers can do many things in the short term to help employers get through the immediate cost of living crisis, but they still need to reinforce the message that employees must plan for their future.
4. Use the resources available
Employers can also signpost the broad range of financial tools available online, as well as financial wellbeing charities such as Stepchange, the UKs leading debt charity, and Citizens Advice, which offers advice on many issues including debt and money problems. Plus, the government-backed Money Advice Service can also help. Many employers will also have benefits providers and financial experts on hand to provide workshops and 1-2-1s.
The cost-of-living crisis has been a catalyst for organisations to start developing financial wellbeing strategies alongside mental and physical wellbeing.
For leading employers, financial wellbeing is no longer a topical conversation, but a core and established pillar within their employee benefit strategy. It is these employers who are not only educating employees and becoming their trusted voice, but also engaging with experts and providing products to enable employees to take action and establish healthier financial habits.
Supplied by REBA Associate Member, Howden Employee Benefits
Howden provides insurance broking, risk management and claims consulting services, globally. We work with clients of all sizes to provide dedicated employee benefits & wellbeing consultancy.
