Financial wellbeing: the facts
Although financial wellbeing is still a relatively new area of wellbeing, over 50% of UK organisations now understand they have a significant role to play in assisting their employees with their financial health. This figure is set to rise to over 70% over the next few years (The State of Employee Financial Wellbeing, HR Zone, 2019).
Perhaps one of the main reasons for the rapid rise in employers prioritising financial wellbeing has been due to the shocking statistics that have emerged over the last few years.
The Employer’s Guide to Financial Wellbeing 2019-20 found that 36% of employees are regularly worrying about money. This is far more than any other area of life, including careers (26%), health (24%) and relationships (19%).
The research also revealed that nearly 19% of UK employees save nothing each month and 20% only save up to £50. Without savings in place, many people are left highly vulnerable to unexpected life events that can pull them into debt.
Holistic financial wellbeing
In the past, employers typically focussed on employees long-term financial wellbeing such as pensions, ISAs and share save.
Long-term financial wellbeing is, of course, a vital component to a financial wellbeing programme, but a proper holistic financial wellbeing offering should include support for the kinds of immediate short-term financial pressures so many employees are facing, such as managing debt and creating a savings buffer that allows them to deal with an unexpected expense.
The fact remains that if HR leaders don’t focus on creating a holistic approach, their organisations will be left behind.
So what is the challenge?
The question for HR leaders is not ‘why financial wellbeing?’ but ‘how do I make this happen?’ The challenges are often the same, regardless of industry type and size of the company:
How can I convince senior leadership to make this a business priority?
How do I find out who needs help and what help should we be providing?
How do I try and get people to be more open about talking about money?
How can I effectively communicate our wellbeing offering?
How can I measure whether our financial wellbeing offering is effective?
How can employers prioritise financial wellbeing?
In response to these questions, we have developed a toolkit with six practical steps to address these challenges:
Step 1 - Build a robust business case
A clear business case for financial wellbeing should be understood by all stakeholders. It needs to show the cost of inaction and how financial wellbeing supports your people and business strategy.
Step 2 - Know your workforce
By understanding the needs of employees across your organisation, you can determine the most appropriate benefits for your people.
Step 3 - Enable culture change
Talking about money continues to be a taboo subject in society. Unless we challenge this, the most vulnerable will remain hesitant to come forward to seek help.
Step 4 - Focus on progress, not perfection
Successful financial wellbeing programmes address those with the greatest need first, making it ok to talk about money, and built a broader programme from there.
Step 5 - Communicate awareness and availability
Even if you have a great set of benefits if employees don’t know they exist, they will have limited impact. Organisations that can communicate effectively also have the greatest levels of engagement and awareness.
Step 6 - Measure the impact
If senior management cannot see the impact of the programme, then it may lose its priority. It’s important to agree on the criteria to measure success.
Want to find out more about the six steps?
Download your copy of our toolkit: How to implement a financial wellbeing programme: Six practical steps here.