- It is important to understand employees’ needs before putting any financial wellbeing strategies in place.
- Any employee, regardless of their salary, may be in need of financial wellbeing support, so a sensitive approach to gleaning this is desirable.
- Encouraging conversations about financial needs and experiences can help foster a culture of openness in a workplace.
In its June 2024 State of employee financial wellness report, Payroll Integrations found that 49% of employers believe they are supporting their workforce’s financial wellbeing, whereas just 28% of employees agree. This disparity in beliefs suggests that financial wellbeing strategies are not supporting employees as much as they would like. So, how can employers fix this?
Today’s financial pressures
Today’s workforce faces a range of financial pressures across all income levels. Across the board, everyone has been affected by the cost-of-living crisis, resulting in disposable income not going as far as it used to. This underscores the importance of not only understanding employees’ needs but also having support in place for their financial wellbeing, regardless of their salary level.
Lower earners currently face the greatest financial pressures, as high inflation has increased monthly expenses such as utility bills and groceries, and diminished their ability to reach financial goals.
Scott Stark, senior financial planner at Financial Finesse, explains that mid-earners see less strain on day-to-day essentials, but those who are between 35 to 45 years old can have expenses creeping in.
“Known as the sandwich generation, they’re often faced with expenses related to raising children, while also supporting aging parents in need of extra help,” he says. “This is the group that sees the greatest percentage of early withdrawals from retirement savings. They also grapple with mortgage payments and savings for retirement.”
Even higher earners, whose incomes may have kept better pace with inflation, may face pressure from maintaining lifestyle choices, high tax liabilities, and the need to save for retirement and future investments.
Riaan van Wyk, senior wellbeing data consultant from Barnett Waddingham, adds: “Ongoing issues surrounding the gender pay gap can make women especially vulnerable to financial pressures compared to male peers, which employers should be taking into consideration.”
Establishing needs sensitively
Employees’ needs vary based on factors such as demographics, location and pay level. Personal challenges, responsibilities and goals will also have an impact. Understanding these needs is crucial for developing and sustaining an effective financial wellbeing strategy that offers personalised guidance. However, addressing these requires sensitivity, particularly given their personal nature.
Steph Twidale, client director at Hymans Robertson Personal Wealth, says: “It’s essential to reassure employees that their privacy is respected and that the goal is to support their wellbeing. By fostering a supportive environment and offering confidential avenues for discussion, employers can effectively understand and address the diverse financial needs of their workforce.”
Conducting anonymous surveys can be an effective method to gather data on employees’ financial struggles without compromising privacy. Employers can then use the outcomes to organise focus groups and build programmes and incentives around what would be most impactful.
“Interactive discussions about their financial challenges and the potential support measures they would see as beneficial can help to capture a wide range of perspectives in a secure and empathetic environment,” says Van Wyk.
Employers could also encourage staff to share their experiences to help foster a culture of openness and vulnerability, while also communicating any financial wellbeing initiatives to improve awareness and engagement.
Supportive strategies and schemes
Given the diverse financial pressures faced by today’s workforce, it is clear that a one-size-fits-all approach does not work. Personalisation and flexibility can be key to fostering engagement with benefits.
Financial education programmes delivered through workshops or webinars can be a way for employers to help equip staff with essential financial skills for everyday life, while earned-wage access schemes and emergency lending programmes can be effective in emergencies. Meanwhile, one-to-one guidance sessions to help employees to understand their options can provide a safe space for them to ask questions about their circumstances, while offering extended guidance through financial coaching can help employees set and achieve financial goals. Recognising the need for financial advice and making this easily accessible is crucial.
“Pension scheme providers often offer tools and resources to help employees plan for retirement and understand their pension options, while financial advice firms provide personalised advice on budgeting, saving, investing and managing debt,” says Twidale. “The UK also has a growing financial wellbeing marketplace with platforms and services that employers can utilise. These include apps for budgeting, saving incentives and educational programmes on financial literacy.”
Additionally, integrating all benefits into a comprehensive financial wellbeing programme and using a multi-channel communication strategy can help employees get the most out of the support.
There are several ways for employers to foster financial wellbeing in the workplace, many of which are inexpensive. It is important that they understand needs thoroughly, so they can ensure strategies go far enough to support their employees.
