Top tips to improve employees’ financial wellbeing and mental health
As such, given the current cost of living crisis, a big part of looking after your employees’ mental health is helping them manage their day-to-day finances. We’re all expecting energy bills to increase again in October, but Ofgem has recently admitted to MPs that the hike is likely to be a lot more than previously thought, and so employees who are already feeling the pinch are going to have to look for ways to cut costs even further.
Support in the workplace is crucial. There’s no doubt that financial wellbeing in the workplace is becoming a bigger focus, but it can’t be just about education and coaching, it has to include practical help that takes the pressure off now.
Here’s three great ways to support your employees’ financial wellbeing and mental health:
1. Review your total reward package
Financial wellbeing extends beyond pay – many benefits make up a financial wellbeing strategy not just salary. But everyone’s financial needs are different and so a one size fits all approach to benefits is not an effective approach – people need choice. And offering choice doesn’t mean it has to be difficult either – flexible benefits packages have become so popular, rather than a list of benefits that apply to some employees’ lifestyles and not others, employees are able to select a package that suits their individual needs. Like most things these days, it’s about a personalised approach.
Even better, use feedback or surveys to ask employees what they’re looking for in a benefits package to know your support is really targeted and creating an impact. This can have a huge influence on staff mental health, knowing they are financially resilient means they are more motivated and productive, as well as feeling supported.
2. Look at increasing disposable income
It’s not just employees who are feeling the pinch. With increased National Insurance costs, energy bills and interest rate hikes, businesses are feeling the pressure too. But helping employees with today’s costs isn’t necessarily about increasing gross salaries, it’s about increasing what ends up in their bank accounts which doesn’t have to increase cost to employers.
For example, salary exchange for pensions – also known as salary sacrifice.
For someone earning £30,000 this could mean an extra £192 disposable income. And then for the employer, there’s a potential saving of over £200 which could either be kept or paid into accessible savings to give employees a helping hand in becoming more financially resilient.
To find out more, take a look at our latest white paper.
3. Help employees save for short- and medium-term goals
Most employees are auto enrolled into a workplace pension which means they’re at least saving for retirement. But what does this mean for employees trying to secure their first home or trying to build up a financial buffer to cover unforeseen emergency expenses?
The question is, what role can employers play in helping staff become more financially resilient?
First, by not thinking about workplace savings as just pensions. With the best will in the world, a healthy pension pot is not going to help a younger employee deal with an immediate financial crisis – and this is what being financially resilient is all about – it’s having accessible cash reserves. Whilst saving for retirement is important, 73% of employees agree that building up savings that can be accessed when needed is just as important, according to our May 2020 research.
Perhaps the most compelling statistic of why workplace savings are so important is one from Money Helper (previously the Money Advice Service), which confirmed that even before the pandemic, there were more than 16 million people in the UK with less than £100 in accessible savings.
Since then, we have seen an increased focus on saving, our own research from May 2020 does shed some light on this. Regardless of financial position, for 76% of employees the pandemic made them realise that having savings to fall back on is important. Covid-19 was the first national crisis many of us have faced, but we’re already experiencing another in the form of cost of living, so it’s vital that people are supported to become more financially resilient.
If the pandemic and the cost of living crisis has shown us anything, it’s that workplace savings can’t be just about pensions. Pensions on their own just don’t recognise the reality of most employees’ financial needs – a healthy pension pot that can’t be accessed until age 55 is of no use to someone struggling to pay their bills today.
In partnership with Cushon
Cushon is an online savings&investments platform provider, offering holistic workplace savings.
