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08 Dec 2021
by John Yates

How to use financial wellbeing as a way of retaining younger talent

Research has shown that a salary increase is one of the key drivers for people changing jobs, with younger workers the most likely to move.

 

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Whilst some turnover can be good for a business to inject fresh ideas, too much can be frustrating when you’re losing your best young talent; not to mention the direct and indirect costs of recruitment and training.

Additionally, increasing everyone’s salary to encourage them to stay isn’t realistic, or even the right reward strategy, so what else can be done?

If you improve the financial lives of your people, they’re less likely to have the desire to move for a few extra pounds in their pocket. In fact, they are more likely to value and appreciate the effort you’re making and stay within the organisation long-term. And the great news is, there are plenty of things you can do for very little cost.

The basics

Financial wellbeing isn’t something you can buy; it’s about behaviours and having the confidence to make good decisions about money. Educating your people around some of the basics is fundamental and budgeting is a great place to start.

Having awareness of where their money goes each month sounds straightforward, but the ability to budget is a skill that employers can impart easily. As a starting point, there are great resources on the MoneyHelper website for employees, including a budget planner.

What your employees want

Consider the spending needs of your people. Engagement surveys can help you to understand the needs of your employees, but even without that, simple analytics and broad research like the FCA Financial Lives survey can help you understand what your employees are likely to want. This will help you align education, engagement, and benefits accordingly.

Businesses should investigate whether they could arrange corporate rates or discounts for things employees are already purchasing. This could leave more money aside for easing the cost of living or saving for the future.

While offers and discounts for everyday spending and big-ticket items such as gym memberships and travel insurance are all benefits that are likely to appeal to younger workers.

More than just pension saving

Your workplace pension is likely to be your biggest reward spend after salary. And whilst pensions are a great, tax-efficient way to save for retirement, younger employees might find debt management and saving for a property more attractive.

A key objective for younger employees could be buying their first property and businesses can help with a Lifetime ISA workplace savings account with bonuses from the Government, to aid in saving for a deposit.

Access to other workplace savings options, like ISAs, can help your people build up financial resilience and savings for short- to medium-term goals. It also avoids having financial benefits solely focused on long-term retirement planning.

Another benefit would be access to a mortgage adviser who can help with first time buyers or information on the importance of a credit score, and how to improve it.

Bringing these benefits together is a great example of a start-to-finish strategy to achieve an objective, rather than simply listing a range of benefits without considering how they can interact and help.

It’s not just your people who benefit

Helping to improve the financial lives of your people is a great thing to do, and there are benefits for the company too. Improved financial wellbeing in the workplace will reduce the impact of absenteeism and presenteeism, and feed into your retention strategy, as employees will have more money. If you engage your employees in your financial wellbeing benefits, they will thank you for it.

The author is John Yates, principal & DC proposition leader at Buck.

This article is provided by Buck.

In partnership with Buck

Buck is a global, integrated HR consulting, benefits administration & technology services provider.

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