The level of the financial impact on UK households arising from COVID-19 has been profound, and for many employees, it will not go back to normal for some time to come. During this challenging time, employers need to provide helpful communication, support, and benefits to help address their employees' changing financial needs.
But there's an ongoing problem for employers looking to help their people; most of the issues faced by employees are hidden from their employers (especially while working remotely). Many people are still uncomfortable talking about money, even with their loved ones.
So, how can you tell if your employees are suffering from poor financial wellbeing and then offer the right support to help them achieve a happier and healthier life?
Measuring financial wellbeing
An employee's level of financial wellbeing is not always determined by their income, but more so by their attitude, habits and behaviours.
In 2018, our Salary Finance team came up with the concept of the Financial Fitness Score, based on a set of behavioural questions related to spending, saving and borrowing habits. From these questions, we derived five Financial Fitness Scores ranging from one to five: the higher someone's Financial Fitness Score, the greater their financial wellbeing.
The impact of Covid-19 is likely to be more significant on those with lower Financial Fitness Scores, as they have less resilience to deal with sudden changes.
The difference between Copers and Planners
We know that most employees fall into either having low levels of financial fitness (Copers) or having a higher level of financial fitness (Planners).
Copers have a 'spend first, save what's left over' attitude.
Planners are naturally inclined to save first and spend what is left over.
A part of our annual study into employee financial wellbeing, The Employer's Guide to Financial Wellbeing 2020-21, looked at the impact the past year has had on both groups.
We found that 45% of Copers are worried about money (UK average is 26%) and have sleepless nights because of their money worries, whereas only 14% of planners are concerned about their finances.
As an employer, it is important to know the effects of this burden on your employees.
For instance, there’s no question that a Coper's productivity and work quality are affected by their money worries:
29% find it difficult to do daily tasks on time.
27% feel that personal money worries have affected the quality of their work.
22% Personal money worries have affected relationships with co-workers.
38% of Copers feel anxious and are prone to panic attacks, whereas only 17% of Planners feel on edge.
Copers are also more likely to help their loved ones in times of need and are also more likely to take on additional debt to support their loved ones:
39% of Copers and as opposed to 23% of Planners have supported loved ones financially throughout the pandemic.
30% of Copers and 21% of Planners took on additional debt due to supporting family and friends during COVID-19
How can employers help?
Once you have assessed and understand the needs of your business, you should build a package of financial benefits that can have a meaningful impact on their daily lives.
Although the financial assistance Copers need, like affordable loans linked to salary, responsible salary advances, savings schemes and financial education, may seem a little more obvious; Planners will certainly embrace solutions that make managing their finances simpler.
Need help getting started?
If you would like to talk through how to create an effective, holistic programme that works for your people, our dedicated team can help you identify the best financial benefits for your business.
Read our insightful new report on the effects of Covid-19 on employees here.