Defining and implementing financial wellbeing strategies that work for all your staff

Wellbeing is a huge part of our work culture now, with discussions around mental health and wellbeing-focused policy becoming more and more the norm - including Financial Wellbeing. For HR professionals, understanding and supporting the financial needs of the workforce is imperative - but understanding it is the first step.

Financial wellbeing in the context of human resources refers to the overall financial health and stability of employees within an organisation. It extends beyond mere income and encompasses various elements that contribute to an individual's financial security and satisfaction. As organisations increasingly recognise the impact of employee wellbeing on productivity and engagement, addressing financial wellbeing has become a crucial aspect of HR strategies.

At its core, financial wellbeing involves the ability of employees to meet their financial obligations, manage unexpected expenses, and plan for future financial goals. It goes beyond the paycheck, taking into account factors such as debt levels, savings, and the ability to cope with financial stressors. A financially well workforce is more likely to be focused, motivated, and less distracted by personal financial concerns, ultimately enhancing their professional performance.

HR professionals play a pivotal role in fostering financial wellbeing within their organisations. This involves providing resources and support to help employees develop financial literacy, make informed decisions about their finances, and access tools that promote responsible financial management. Education on budgeting, savings strategies, and investment options can empower employees to take control of their financial futures.

Additionally, HR can introduce and promote employee benefits that contribute to financial wellbeing, such as retirement plans, financial counseling services, and flexible compensation packages. Creating a supportive work environment where employees feel comfortable discussing financial concerns without fear of judgment is crucial. This can be facilitated through open communication channels and the implementation of programs that address the unique financial challenges faced by diverse employee demographics.

A broad church, you might feel. And you're right. So let's break it down a little.

Sam Lathey, CEO, financial coaching provider Bippit, explains: “Financial wellness, also known as financial wellbeing, is hard to define. There’s no universally-agreed definition but generally, most of the commonly-cited definitions of financial wellbeing split the term into two parts: objective and subjective financial wellbeing. Objective financial wellbeing is a person’s financial position, taking into account their savings, debts, income v outgoings, cashflow, pensions, what insurance products they have and more.”

"HR trends will always come and go, but financial wellbeing is here to stay. I always encourage people to ask themselves, was mental wellbeing in the workplace a flash in the pan, or is it now a core part of HR strategy?" asks Ruth Handcock, CEO at money advisory specialist Octopus Money. "25% of us worry about money every single day, and 79% can’t concentrate on work because of financial anxiety. Not only is this awful for employees, it means employers have a less motivated, less productive team."

'Blaming' the cost of living crisis

“The global pandemic and the cost-of-living crisis have exacerbated and accelerated the need for financial wellbeing support in the workplace, but they didn’t create the need," cautions Lathey. "Employees are financial animals and big financial decisions have to be made all the time. These decisions can have big consequences, and if you want your employees to thrive, it makes sense that you’d want to support them to make the financial decisions that have to be made all through life."