Need to know:
- Introducing financial education can drastically improve financial wellbeing
- Reinventing benefits to offer financial support can aid employees with financial constraints
- Financial benefits need to be communicated in the right way to increase the chances of effectiveness
The financial wellbeing of employees has become a key priority for many employers. A study in 2017, Employee financial wellbeing by the Chartered Institute of Personnel and Development (CIPD), found that one in four employees admitted to financial worries impacting their productivity at work.
With Covid-19 (Coronavirus) placing significant strain on the financial situations of many employees, organisations can promote a number of benefits to support their employees financially, not just through the pandemic but all year round.
Implementing financial education to improve financial wellbeing
Offering financial education around any benefits is crucial to ensure that the right support is provided to begin with. Employers need to ensure that any schemes do not encourage employees to spend unnecessarily.
Tim Perkins, founder at Nudge, says: “Financial wellbeing is about control. When people are in control of their money, they are in control of their lives. They are happier, less anxious and more empowered.
“With money underpinning all benefits, there can be many that can be used to promote financial wellbeing, but it’s very dangerous without sales-free independent financial education as an underpin.”
Perkins believes that financial education is an all-year round necessity and should change with the times. Employee financial wellbeing needs are not static so the support available should not be either.
How to promote the right support
Employers must ensure that the benefits they offer accommodate a wide-range of financial situations. A workforce will comprise different people going through different financial decisions throughout their careers, and in offering the right benefits, employers can boost engagement, productivity and wellbeing. But the benefits need to be effectively communicated in a way that will appeal to employees.
Kate Smith, head of pensions at Aegon, says: “Many employers are well-positioned to support the financial wellbeing of employees through the selection of workplace benefits they already offer, they just need to ensure that employees know about them.
“The first action an employer can take is raising the visibility of the benefits available and presenting them in a way that demonstrates the broader impact of each benefit financially, and linking this into wellbeing.”
This requires employers to invest in communication and engagement methods to ensure that they can reach every employee. “Those employers investing in the communication of benefits and keeping financial wellbeing in mind when designing these communications are more likely to reach those with financial worries,” says Smith.
Financial support in difficult times
During the turbulent time that the Coronavirus pandemic has brought, offering benefits such as home insurance support, retail discounts, or even technology benefits to ensure that the experience while social distancing is healthy, can directly impact the financial wellbeing of employees.
Jeff Fox, principal at Aon, says: “Employers are [currently] in a different situation [and] asking employees what they want and what they need is a great first step in forming an effective benefits strategy.
“Many employers are considering how they can support employees to manage their money better by offering work-based money aggregation tools that connect together bank accounts, credit cards, and various other assets [that employees] might have.”
Debt management schemes and budget learning opportunities can go a long way in aiding the financial education of employees. Additionally, offering the right discounts, such as on food and leisure activities, can help employees find a way to manage through times of struggle.
Benefits can be used to provide financial support for employees in many ways, and it might be a case of repositioning these to show just how they can help in different situations. Bikes-for-work schemes can be promoted as an alternative commute option to public transport, while helping to keep employees active at a discounted price.
Voluntary benefit schemes that offer discounts on grocery shopping and other household purchases can also help to give employees a little peace of mind in troubling times.
“Employees can understand the financial as well as emotional benefits of options like life insurance or critical illness cover,” says Smith. “Or hear how much cheaper and greener it might be to buy a bike through a cycle-to-work scheme rather than leaving it up to the individual to purchase at full price. Additionally, offering supermarket discount schemes could work effectively and show how much people could save.
“Businesses investing in the communication of benefits and being creative with financial support are the ones that are more likely to reach those with financial worries.”
Employers can ensure they are supporting the financial wellbeing of their workforce through difficult times by effectively communicating and promoting the ways in which benefits can offer some relief.