REBA Inside Track: From tactical to strategic – how financial wellbeing is evolving
To date, thinking around financial wellbeing has largely been tactical rather than strategic. However, REBA’s Financial Wellbeing Research 2023 shows an increased emphasis on wider HR strategic issues, such as workplace sustainability, employee wellbeing and planning for an ageing workforce, through to filling talent gaps and meeting diversity, equity and inclusion (DEI) objectives. As such, we expect to see a switch to prioritising strategy and joined-up financial wellbeing over the next few years.
REBA’s Financial Wellbeing Research 2023 shows that almost three-quarters of respondents are looking to join up financial wellbeing offerings over the next two years, so we should soon start to see significant moves towards cohesive financial wellbeing strategies.
While the cost-of-living crisis has caused employers to respond reactively to the financial wellbeing needs of employees over the past couple of years, it is primarily the need to recruit and retain a wider diversity of skills and talent that has accelerated the expansion of what is on offer to employees. Previously lower profile groups, such as parents and carers, are now getting more attention, although the needs of lower paid workers are still largely ignored by the majority.
Growth areas
The five financial wellbeing benefits that are tipped for greatest growth give a clue about the variation of employee needs. They are:
- tax-free savings wrappers
- wage advance schemes
- enhanced support for parents and carers
- will writing services
- pay-as-you-go savings schemes.
Despite the economic outlook, the desire to save (for those in work) appears strong for many.
While the workplace pension still dominates all financial offerings via the employer, whether as a compliance hygiene factor or as an enhanced retention tool, this research indicates that employers are going to be thinking much harder about retirement strategy as the workforce ages.
Longer working lives are reshaping workforce planning and skills mapping, as well as career paths, flexibility in working patterns and how the over-55s want to take pay and access pension pots.
The research shows that currently about one-in 10 employers have seen the ageing workforce as a driver of change to financial wellbeing decisions over the past two years. This will almost triple in the next two years – meaning that 40% of all respondents will be focusing on financial wellbeing support for an ageing workforce. Older workers unable to retire due to inadequate savings will increasingly become a challenge for employers if not mitigated now.
Making connections
To achieve this, employers are going to need good quality, joined-up information to work out what is needed. However, our research results show that there is still limited linkage between DEI goals (including pay and pensions gaps) and financial wellbeing programmes. Alternatively, due to the highly personalised decisions each employee needs to make, it may be more of a case of focusing on financial education, coaching and guidance to adequately equip people for their own futures.
