Two-thirds of organisations have yet to implement formal employee financial wellbeing strategies, new research has revealed.
Among the many changes and lessons from the COVID pandemic is the renewed focus on and better understanding of the importance of employee wellbeing as being mission-critical for many organisations. Mental, physical and social wellbeing were a primary concern during that period.
And now, with the unfolding cost of living crisis, and significant parts of all organisations’ workforces already being impacted, the time for a renewed focus on better supporting employee’s financial wellbeing can never have been greater.
However, a significant study by Mercer has revealed that despite existing research and analysis into the interconnections between financial wellbeing and mental, physical and social wellbeing, many organisations are only now really focusing on developing better defined financial wellbeing programmes for their employees.
According to Mercer’s Financial Wellbeing Index, during the early days of the pandemic, 86% of organisations took additional active steps to support the financial wellbeing of their employees. As the study indicates though, only one third of organisations had a formal financial wellbeing strategy in place for employees.
“In 2015, only 15% of organisations had a financial wellbeing strategy,” said Jeremy Milton, Principal and Financial Wellbeing Leader at Mercer. “Encouragingly, in 2021, the figure had more than doubled to 37 per cent - with over two-thirds of those already planning to make further improvements.
“A further third of organisations surveyed said they were committed to developing a formal financial wellbeing strategy in the near future.”
While these figures point to positive additions to employee wellbeing, Mr. Milton has a word of caution for organisations that confuse improving financial wellbeing by simply adding ad-hoc benefits and support for a formal strategy that meets their employees’ needs.
“The Index shows that almost all organisations need to be bold enough to directly listen to their employees to understand what they need and would be most supportive in the challenging period ahead of us all. Currently, when it comes to financial wellbeing, nearly two thirds of organisations do not even know how their employees are managing financially – and less than 20% have been brave enough to ask them directly – that mindset needs to change for organisations to successfully move forward in this space,” he added.
“If this trend continues, organisations expecting to make further improvements to their wellbeing programme are in danger of simply adding new services, solutions or products in isolation — and therefore costs — without truly adding value for their employees.
“Focusing and reordering what you already do, built on a better understanding of your own workforces needs and your future intention is a great start. Many organisations could then enhance and improve their longer-term offerings through some simple yet effective steps and meaningful additions to their current programmes.”
Mr. Milton suggests that with the additional pressure of the cost of living crisis, there has never been a more critical time for organisations to build on the ‘we’re in this together’ pandemic response, by creating better constructed and more rounded financial wellbeing strategies and programmes.
“For organisations to successfully level up and improve their financial wellbeing programmes in 2022 and beyond, organisations must fill that gap in knowledge and translate it into more cohesive and direct actions to build the right financial wellbeing frameworks, solutions and support for their own workforce - and that will enable their employees to be better equipped to help themselves in future, and take more positive steps and actions,” he said.