REBA inside track: Employers need to balance the here and now with evolving financial wellbeing trends
To focus solely on employees’ immediate money challenges can mean missing longer-term underlying shifts that will reshape financial wellbeing strategies over the coming years. While it is unwise to ignore the right-here-right-now stresses of those struggling to stretch their wages, employers must also consider broader societal trends.
This research shows that the fastest evolving driver of change will be the ageing of the population. While about a quarter (23%) of respondents say this has influenced their thinking over the past two years, this jumps to four in 10 (41%) believing it will be a factor over the next two years. This 78% leap indicates a trend that will continue to rise significantly over the coming years.
Out of sync
Rethinking how we work, live, save and spend when our total earning lives are likely to span about sixty years calls into question why we focus almost single-mindedly on saving harder into pensions in order to completely retire before or in our sixties.
Cliff-edge retirements are on their way out, while blended working, longer periods of leave throughout careers and life-long learning are on their way in. Effective workplace financial offerings, therefore, are likely to shift, too. This research demonstrates that major life events are already becoming increasingly acknowledged by employers, not least because of the way related money pressures distract from work or cause valued employees to leave.
While parents and carers in the workplace are not yet getting the full support they need, this research shows that most employers are aware that these cohorts have specific risks to their financial wellbeing. Almost three-quarters (73%) acknowledge this for working parents, and nearly half (46%) see this among their employees who care for adult dependants. Early indications in the data show a gradual increase in the proportion of employers acting to support those with caring responsibilities.
Home truths
The UK’s high housing costs, from rent and energy bills through to mortgage costs, have caused financial risks for well over half of all workforces (64% of employers say high rents are causing a risk, and 58% say the same of high mortgage costs). Housing affects where people live, the conditions in which they live and how well they sleep at night. Longer term, if unsolved, this situation will lead to increasing numbers of future retirees not owning a home when they finally stop earning. While this latter scenario isa bigger issue for society and government than for individual employers, it is leading to debate about the balance in emphasis between long-term workplace savings going into pensions versus supporting people to get onto the housing ladder.
Such societal shifts may be why this research shows a dramatic surge in employers planning to measure the effectiveness of their financial wellbeing spend against HR objectives such as retention, attraction, diversity gaps and employee engagement. Needs are changing and strategies must realign. Without data, it will be hard to understand exactly what actions apply for each workforce.
