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Companies of all sizes across all sectors are starting to understand the benefits of financial wellbeing initiatives, however less than half have a defined strategy in place.
As we will look to return to normality after the COVID-19 crisis, creating a financial wellbeing strategy would not only deliver a profound effect on your employee and their families, it will demonstrate a consideration that ultimately is extremely beneficial for your business. By developing a financial wellbeing strategy rather than just a collection of benefits, you are offering your employees support exactly where they are likely to need it most, as an incredible 70% of UK workers are living payday to payday. But it can also be used to achieve wider business objectives, like reducing the common increase in sickness or absence in the last working week before payday, when often staff do not have the money to get to their place of work.
If a business was looking to address this, you could ensure that a low cost and easy to implement benefit with a flexible approach to when they receive some of their wage is available. This would also contribute to improving staff retention, as again this would make them perhaps re-consider in more depth moving to another job that doesn’t have such a progressive and understanding perspective when it comes to their money. By connecting the financial wellbeing strategy to whatever are the company’s objectives, it delivers clear KPIs showing how it improves these areas.
Whilst annual spend on a ‘collective benefits’ strategy is on average £75 per employee per annum, a specific ‘financial benefit’ strategy costs on average less than a third of that at just £24 per employee per annum. And yet this type of strategy could engage almost 100% of your staff in at least one point during the year by eliminating any reliance or temptation to use an expensive payday loan, credit card or overdraft facility. A recent survey of HR Directors showed that spending for staff wellbeing and benefits is forecasted to rise faster than any other and that those companies with a specific wellbeing strategy, will have the ability to prove their return on investment.
Engaged employees are happy employees and are an asset to the business. When engaging staff at work, it is commonly seen that performance and productivity improve as well as reductions in absence and staff churn. In fact there are case studies supporting the rise of engagement levels by a staggering 39% if employees believe that their employer cares specifically about their financial wellbeing. Many companies are now recognising the link between wellbeing and engagement and more than half of companies actually launch a financial wellbeing strategy in order to improve engagement. Being a socially responsible employer and one with a modern or progressive attitude, improves engagement and is one of the easiests ways for an employer to show it really cares and values its staff.
With everyone returning to work after the COVID-19 crisis and all companies having to replace the employees they made redundant a financial wellbeing strategy in place will greatly expand their applicant pool. Further, over half of employees would look for alternative employment if they felt their employer didn’t provide for, demonstrate or value their wellbeing. With just the simplest of financial wellbeing initiatives, you will have a greater chance of retaining your best employees and attracting the best candidates.
The penetration of technology and the various financial apps assisting us with the day to day finances through our lives, employers have an opportunity to provide a clearly defined financial wellbeing strategy setting out the importance of it to both companies and staff alike. Employees in turn appreciate that their employers are helping them to improve their financial state and lifestyle. Employers will benefit from lower levels of absence and increased productivity.
So let’s accept that financial wellbeing is of high value or at the very least an integral part to any wider HR strategy for any type of business in any sector. After all, when did you stop falling short at the end of the month?
Today almost all workforces are multi-generational, so it’s important that your financial wellbeing strategy supports every generation and every individual. In order to do this, it’s vital that you build an inclusive approach to your strategy. Ideally it would be extremely valuable to be able to research your employee’s individual needs. To provide a financial wellbeing strategy that incorporates the needs of your entire workforce, it’s vital that you understand those needs. Information can be obtained through methods such as surveys, questionnaires/forms or even opinions via brief Q&A sessions with line managers.
Another benefit of a flexible wage app is having the visibility to be able to offer assistance or support where or when an employee really needs it. For example, if an employee was constantly or immediately using the wage application, you would be able to identify this and offer financial education, or you make adjustments to their schedule to support their own situation, perhaps through opportunities for extra work. It is easy to provide financial education with a readily available set of tools and information to develop their knowledge. In today’s world there is a whole range of quick, easy to arrange but very expensive loan products. By offering help internally it is both discrete and of huge long term benefit that encourages loyalty and creates that employee wellbeing that is so important.
Once you have a strategy in place, it is easy to encourage your employees to have conversations about their financial wellbeing. When your employees know that there is someone they can speak to about their financial well being, they feel supported within the workplace. By recognising how financial worries may affect your workforce and providing a flexible but controlled wage environment to help support them to avoid going into an expensive debt cycle, you improve your business in multiple ways too.
