- Education and financial coaching can help address underlying symptoms of financial stress for some staff.
- Being able to access immediate and practical support will not just help employees financially, but will also better their emotional wellbeing and improve their quality of life.
- The end goal of a financial aid fund should be a measurable improvement in financial wellbeing, which can be achieved by helping people make better financial decisions.
During the Covid-19 (Coronavirus) pandemic, many employees found themselves struggling financially and have seen their household income impacted as a result of being placed on the furlough scheme or a reduction in their hours. Introducing a financial aid fund for staff can be useful for situations such as this and in times of emergency. Here are some top tips for employers that want to help their staff financially.
Introducing the fund
An initiative like a financial aid fund can often benefit employees by allying it to wellbeing support that aims to prevent people getting into financial difficulties, as well as helping them to develop saving and budgeting strategies that make dealing with the financial impact of the pandemic easier.
Organisations often find that staff are experiencing occasional, short-term financial problems, such as a family member losing their job or when unexpected life expenses come up.
Liam Evans, external affairs manager at Turn2us, says that if employees are struggling with money, the stress they experience will undoubtedly affect their entire life, including work. “[Organisations] of all sizes should be encouraged to provide financial aid to employees, whether that is grants, loans or advances, as there are many shapes and sizes it can take. Being able to access immediate and practical support will not just help them financially, but will also better their emotional wellbeing and improve their quality of life,” he adds.
Every single employer should be putting a financial wellbeing policy in place alongside physical and mental health policies in order to avoid financial stress in the workplace, according to wellbeing ambassador at Wagestream, Alex Partridge.
“These are most effective when the business has consulted with employees to better understand their financial wellbeing, built out a strategy to address their biggest points of financial stress, and put fair services in place which empower them to get onto the front foot with their money,” he says.
Do some research
When considering introducing a financial aid fund, it’s important to think about the workforce. Survey staff to find out what their stress points are and whether some experience financial stress in specific ways or at certain times of the year.
Partridge says there are sources of external support to which employees can be connected, such as debt management experts that can help distribute funds through existing charitable bodies.
“[Employees] may be unaware how much help is available, or feel overwhelmed and not know where to begin. Financial coaching can also help address underlying symptoms of financial stress for some staff,” he says. “I spoke to someone recently who had approached their employer for a loan in order to cover an unexpected expense. Yet it turned out they had £500 sitting in a savings pot for a future holiday.”
Educate employees
Financial guidance can help employees to make the most of their workplace benefits and savings to free up money to create a savings pot, either for emergencies or for life events, such as getting married or retirement.
According to Jonathan Watts-Lay, director at Wealth at Work, guidance can help employees understand how to best manage their finances on a day-to-day basis, how to budget and the difference between good and bad debt.
“Employers are now increasingly putting in place financial education seminars and digital support to help improve their employees’ financial wellbeing, with topics ranging from managing debt, improving credit scores and general money management. This can really help employees to feel secure about their finances, and in turn, lead to a confident and financially empowered workforce,” he says.
A strong wellbeing strategy
Financial wellbeing starts with short-term stress reduction such as improving liquidity, but should lead to longer-term resilience. The end goal of a financial aid fund should be a measurable improvement in financial wellbeing, which can be achieved by helping people make better financial decisions.
“Once staff are making the right financial choices, they can make the most out of the money they have,” says Partridge. “Don’t overlook the power of pay itself. It’s the single-most important thing an employer does for its people, and it sits at the heart of financial wellbeing for working adults. Beyond the pay cycle itself, keep in mind that financial wellbeing is most effective when built around pay.”
Read more:
Greene King supports staff with financial hardship fund
Laura Soley and Oliver Scutt: How to introduce a staff hardship fund
