Need to know:
- Many employers already have great financial wellbeing tools in place, they just need to be promoted more effectively.
- Any benefits introduced to support financial wellbeing should be underpinned with education.
- Employers should plan to measure the effectiveness of any financial wellbeing support and be prepared to amend this if situations change.
Employees’ financial wellbeing is under threat. Rising inflation and the spiralling cost of living are shaking the security of households across the country. So what can employers do to make sure employers get the financial wellbeing support that they need? There are some steps employers can take to make sure their benefits package is geared up to specifically support the financial wellbeing of their staff.
Promote the tools already in place
A lot of employers already have great tools in place but need to signpost them better. Jayesh Patel, co-head of defined contribution (DC) consulting for Great Britain at Willis Towers Watson, says: “I find that [employers] have a lot of support: it could be the employee assistance programme (EAP) helpline, for example, that might provide some counselling services, or it could be some really rich benefits, but they’re not communicated well enough. They can be very disjointed and not pulled together.”
Before embarking on a change project, talk to employees, says Alison Kidd, head of reward and employee relations at Virgin Money. “We don’t ever assume that we know all the answers,” she says.
Virgin Money hosts regular online ‘jam’ sessions to hear from employees. Around 150 to 200 colleagues will log into a Teams chat session and respond to one or two big questions. “It’s a rich source of information for us, alongside traditional engagement surveys. The only challenge is distilling all the information,” says Kidd.
Conduct a gap analysis
The next step is to find and plug the gaps in any existing provision. EAP data can be a rich source of information, says Martin Parish, workplace pensions and financial wellbeing lead at Aon. “How many people are calling into the EAP and using the financial debt line? Is there any sort of commonality in terms of location or the cohorts of people who are using it?” he says.
Willis Towers Watson asked UK employees what financial benefits would be most useful in its Global benefits attitudes survey, published in July 2022. The top rated benefit was discounts and subsidies. The second was the ability to save directly from their pay. The third was the ability to have some flexibility within their retirement plans, for example, diverting some pension contributions into a savings vehicle that they could access in emergencies. The fourth was access to financial coaches or advisers.
Use considerate communication
While making communications personal results in better engagement in many areas of HR, experts caution against doing so when it comes to financial wellbeing.
Employers do not have the full picture of an employee’s financial situation. “Over the years, I’ve met highly paid professionals who are struggling financially,” says Parish. “I met one person who had four divorces under his belt, school fees to pay, and he had no pension provision. On the flip side, I’ve been to meetings where I’ve met someone off the shop floor, and they turn around and say, ‘I just inherited five rental properties.’”
Plus, people are often sensitive about money. “Lots of [employees] are happy to tell you that yes, the cost-of-living increases are impacting them hugely and they’re struggling to pay for food, but not everyone does,” says Kidd. “I think having tools available that colleagues can access discreetly means they don’t have to have a conversation with anyone at work, but you are still supporting them.”
Underpin benefits with education
As technology and data leap forward, innovative benefits are springing into existence. While opinions about it are mixed within the employee benefits world, giving people early access to their wages is growing in popularity. Graham James, director at Sodexo Engage, says: “We’re seeing demand growing.”
Giving people early access to their wages could be a lifeline for someone who has to meet an unexpected expense. However, this sort of benefit should be underscored by financial education, caveats James.
Holistic benefits statements which show people how much money they have saved through their benefits can also be powerful, says James. “It is quite difficult to do. But when these savings are put together, that is very powerful. When somebody can see how much they are actually saving, that creates a positive feeling of, ‘This month, I’ve saved £100 or £150’. It’s almost a shopping-around mentality.”
Employers should also make sure they have a plan in place to assess and measure the efficacy of their financial wellbeing support measures. The challenges of recent months have shown how quickly situations can change; employers should keep close to the news agenda and be prepared to put more support in place when it is needed.