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Financial Wellbeing: Building a strong wellbeing strategy to support employees

 

Kelly Hayton

Senior Solutions Advisor

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Over the last few years, the pandemic has forced organisations to refocus on the topic of employee wellbeing. The impact of this can be seen in the increase in commitment and investment, particularly in the space of mental health provision. A 2021 survey found that 53% of employers had added programs to address mental health concernsi because of Covid-19. The positive news is that the legacy of this work can be seen in the factii 51% of organisations now have a standalone wellbeing strategy in support of the wider organisation strategy. Considering these statistics, organisations can be forgiven in thinking that the job is done, and that it is time to focus on other challenges.

However, as we start to emerge from the pandemic, we are faced with another significant challenge to employee wellbeing, which is the growing cost of living crisis. The recent PwC Employee Financial Wellness Survey found that only 42% of respondents said their compensation was able to keep up with the cost of living. This is down 10% from the 2021 surveyiii. This pressure has impacts across the employee landscape, from increased stress to retention challenges as individuals look to alleviate the burden through better terms and conditions elsewhere.

 

So, what can be done?

Financial distress and poor mental health often go hand in hand. Therefore, existing provision and practice still has plenty of value to add. Strengthening current mental health support, and critically focusing on ensuring great awareness and access to this support can only be seen as a positive step. One method to promote awareness could be through colleague storytelling, where the reality of someone’s experience can create a connection. This is particularly the case as challenges can often be seen as a taboo topic.

It may also be a time to explore other resources in the financial wellbeing space. In the longer term, access to saving plans and pensions can provide futureproofing around the topic but cannot alleviate financial challenges someone is experiencing today.

Financial education and advice can support an employee who is struggling. Offering dedicated credit counselling can have a tangible impact. Another piece of the puzzle can be found in the earned wage access schemes, enabling employees to flexibly draw down portions of pay when they need to. A 2021 survey found that 18% of employees are running out of money on a regular basis, and this does not always correlate to those on lower incomes. In those circumstances, the ability to access pay in the case of emergencies ensures those employees do not resort to less secure credit options.

 

Secondly, there are best practices around compensation to ease the burden. Finance Wellbeing offerings are useful, but do not combat issues around low pay. It is important to salary benchmark to not only ensure that pay is keeping up with the market, but also the financial climate as well. Additionally, whilst often seen as a hygiene factor, ensuring that payroll is run accurately and on time is essential. For example, missed overtime payments for an employee who is struggling financially can sometimes make all the difference between affording the essentials, and not.

Finally, wellbeing does not exist in a vacuum. Employees are your best resource in understanding what they need, what is working, and crucially what isn’t. They are also the best resource for helping to co-create meaningful solutions that consider individualised needsvii. By listening and taking action on employee recommendations, not only can you ensure a strong wellbeing strategy, but one which also evolves with the rapidly changing environment.

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