Financial wellbeing has a key role to play in supporting HR goals such as recruiting and retaining employees and improving productivity. However, the factors influencing financial wellbeing strategies are changing. With insight from its latest Financial Wellbeing Research 2023 in association with Reward & Employee Benefits Association, WEALTH at work reveals some of the key topics set to shape future financial wellbeing strategies.
Key topics shaping future financial wellbeing strategies
1. Becoming an employer of choice– Over half of employers (59%) say that a desire to benchmark themselves against competitors (e.g. become an employer of choice or match sector norms) will drive their financial wellbeing strategy in the next two years, which compares with just 42% of employers in the past two years.
2. The cost-of-living crisis– Many employers feel this will continue to have a powerful effect for some time. More than half (57%) expect it to remain a driver of change over the next two years at least, although this concern is receding (was 64% in the previous two years).
3. Workforce sustainability and ESG– The research revealed that employers think that the biggest increase in focus for changing future financial wellbeing strategies was related to workforce sustainability and meeting ESG targets (55% say it will be a driver of change over the next two years, compared to 23% the previous two years and representing a 139% increase). This focus seems to be driving an increasing number of employers to take action to support workforce diversity. For example, half (50%) of employer’s plan to address pay gaps around gender and ethnicity in the next two years. Also, over a third (34%) plan to address pension gaps around gender and ethnicity in the next two years.
4. The mental wellbeing of the workforce– Mental health and financial wellbeing are two important aspects of our lives that are often viewed in isolation. However, the link between these pillars is the top of the agenda for many employers with 54% saying that the mental wellbeing of the workforce is a driver of change in future financial wellbeing strategy.
5. Financial distress in the workplace –Another notable focus for employers will be tackling financial distress in the workplace. The survey found that 44% say that it will be a driver of change in the next two years.
6. Carer costs –The spiralling cost of caring for children, elderly relatives or others is having an increased impact on workplace financial wellbeing strategies. Employers are already acting on the need for change, with 65% planning to target financial wellbeing support for working parents and other carers, or already doing so.
7. Ageing workforce –29% of employers cite an ageing workforce as a driver of change to their financial wellbeing strategies in the next two years, up from 11% in the past two years. 44% say that they plan to offer targeted support for the over 55s in the next couple of years – which has grown from 17% and represents a 159% increase.
Jonathan Watts-Lay, Director, WEALTH at work comments;
“Financial wellbeing has a key role to play in supporting various HR goals such as inclusivity, recruitment, talent retention and productivity, and is integral to improving wider employee wellbeing. However, the drivers of financial wellbeing strategies are continuously evolving, so it’s important to understand what these are so that plans can adapt in line with changing needs.”
He adds; “However, for it to truly make a difference, financial wellbeing initiatives should be inclusive and be accessible to all. As the workforce will have different financial wellbeing requirements, offering employees a range of choices will enable them to select what is suitable for them.”
Watts-Lay explains; “This is a clear call to action for employers to provide short, medium and long-term financial wellbeing support for employees which means providing tailored support at all career stages and covering a mix of needs, such as debt management, building up an emergency fund, managing family finances, and saving for a first home, as well as retirement. Employers may also want to consider funding a range of workplace savings and benefits such as workplace ISA’s, share plans or discount and salary sacrifice schemes, to support these needs and build financial resilience. Not only this, financial wellbeing support should be accessible to reach all of the workforce. Many employers now offer this support through financial education workshops and one-to-one guidance sessions delivered by financial coaches, as well as digital tools and helplines which can be flexibly accessed.
In fact, over the past few years, financial coaching has emerged as a powerful service which helps improve employee financial wellbeing, and is set for significant growth – 12% of employers currently offer it but 41% plan to within the next couple of years – a 241% increase.”