FINANCIAL WELLBEING IN THE WORKPLACE: ADDRESSING DIVERSITY
Adopting a one-size-fits-all approach to financial wellbeing risks missing the point. Staff on the same pay grades may require very different support depending on where they are in their lives and what financial commitments they currently have.
Financial concerns are the primary cause of stress for 10% of employees1. Stressed employees tend to be unhappy employees and can negatively impact the productivity of any business. So what can employers do to help address common, if often diverse, employee financial concerns in an effort to maintain productivity?
The legacy of university tuition fees for example may weigh heavily on younger employees’ minds. Indeed, according to the Sutton Trust, many graduates now graduate from university with a student debt of around £44,5002.
For previous generations, getting a foot on the property ladder would have been one of the first rites of post-university passage. However, property prices in recent years have made this more of a pipe dream for most than a realistic next step. For accountancy giant KPMG their approach to addressing the issue was to support employees with a financial package that included preferential mortgage rates.
That may not be an option for most employers but that doesn’t mean that there aren’t alternative levels of support employers can offer. Financial education should be the central pillar of any wellbeing strategic initiative but for those looking to secure their own roof over their heads, tailoring workshops around saving for a deposit, buying and selling property with input from local experts, or guidance on Help to Buy ISAs, will have you marked up as an employer with a considerate eye on the needs of your employees.
For many employees simply managing family finances from week to week brings challenges of its own. The costs of raising a child in the UK to the age of 21 according to the Guardian now stands at £231,8433. But there is help at hand. Employers should make the most of the Government’s E18 ‘How can you help your employees with childcare’ booklet outlining what is available to employees from a tax and National Insurance Contribution perspective.
Pensions arguably remain at the top of the list in terms of helping to secure employees’ financial futures and wellbeing. However, many employees remain unaware of their saving and retirement options. So beyond a legal obligation to enrol staff in the company scheme, pensions enable employers to talk to employees about the importance of saving, the associated tax benefits, and of course the new retirement options.
If managed well, an appropriately targeted financial wellbeing strategy helps employees manage their money more effectively and make constructive decisions about their finances. Helping manage employees’ financial responsibilities frees them up to focus on the job in hand instead of agonising over how they are going to balance their outgoings with their income.
As with the introduction of any new initiative in a business, financial wellbeing will require an initial investment of time. But it doesn’t have to be costly, particularly where the focus is on financial education. Employers will find much of what they require is already available, perhaps through the Government, or through a financial services provider. A bit of clever linking to the right content, for the right people can make all the difference.
Information correct as at October 2016