Top tips to support employees with unhealthy financial habits

Financial habits

Need to know:

  • Addictive and unhealthy financial habits, such as gambling, are hard to spot, so financial wellbeing initiatives must offer a variety of supports to help employees with a wide range of needs.
  • Looking into staff behaviours and demographics can help tailor communications and construct a strategy that fits with the specific workforce at hand.
  • Other systems, such as mental health supports and discount vouchers, can be helpful supplements to a successful financial education and wellbeing programme.

Numerous financial concerns are likely to weigh on the minds of modern employees, whether these are about saving for a first house or consolidating debt.

Impulsive financial habits, such as overspending and gambling, can be particularly damaging. However, these are sensitive areas for discussion, especially as employees may be reluctant to raise an issue in the workplace that they feel will affect their reputation or job security.

The DNA of financial wellbeing, our borrowing needs, published by Neyber in September 2018, found that 50% of employers believe implementing a financial wellbeing strategy is key to improving employee wellbeing. So, how can employers ensure that those with habits and addictions that impact their finances are able to reap the rewards of an effective financial wellbeing programme?

Understand employees’ personalities

The first step to helping employees improve their spending habits is to create targeted information and communications, which are more likely to be engaging and effective.

Nick McClelland, director at JLT Employee Benefits, says: “If [employers] try different communications based on, for example, four different approaches to try and capture as much of the population as they can, that’s a better step than just doing the one-size-fits-all, which is what usually happens.”

Data accrued from benefits platforms can be a particular help when attempting to gauge what messages will have the most impact for different organisations, and for various groups within them.

Jeremy Beament, co-founder and director at Nudge Global, says: “We have anonymised management information that allows us to track trends of how people are interacting with our service. [When] we see a spike in people looking at materials relating to debt and borrowing, that then waves a red flag that there’s a potential problem within that organisation, potentially within a particular subset.”

Focus on fundamentals

It might be difficult to gather information on the prevalence of habits such as gambling or shopping addiction within a workforce. However, helping employees examine their own spending habits can provide a sense of the problem areas.

The consequences of over-spending might be seen, for example, in increased requests for assistance with debt management. During financial wellbeing seminars and workshops, attendees can also delve into fundamental questions around their spending habits, which will help tailor the assistance they receive, says Jonathan Watts-Lay, director, Wealth at Work.

He explains: “We do quite a bit of work around basic money management, looking at where money is spent every month. Where are they spending their money? How could they potentially spend less and could they consolidate debt?”

Once a seminar has covered a topic such as debt, employers should then be sure to signpost to the relevant available benefits, to ensure that anyone for whom the session was particularly affecting is galvanised into action.

Do more than manage money

An effective financial education programme will go beyond lessons on money management, says Beament. “Financial education focuses on things like paying bills on time, understanding how to prioritise dealing with debt, [and will] signpost employees to the employee assistance programme (EAP).”

Employees should be reminded that these provisions are not reserved for those in crisis, and that they are part of any healthy approach to improving finances, Watts-Lay adds: “Guidance helplines are not there as a reaction to someone who is in trouble and about to go bankrupt. A helpline will help an employee talk through what is available and what options might help.”

Although they may not be obvious avenues of support for financial wellbeing, employers can also promote voluntary benefits schemes, such as retail discounts, to help employees avoid reaching financial crisis.

However, it is important to carefully consider how these initiatives are promoted, so as to ensure they are used as responsible saving techniques, rather than reasons to spend more.

Look at the deeper issues

The effects of financial stress can reach further than an employee’s bank account, and the causes of destructive or impulsive spending habits might equally stem from something deeper.

Ideally, then, employers will take an approach that incorporates mental health support.

“We’ve seen an increase in organisations that have mental health first aiders trained up, so employees can be made aware of who those people are and what they can do,” notes Beament.

Whether financial education, debt consolidation, psychological support, or any of the myriad methods of helping employees with unhealthy spending habits, financial wellbeing programmes, at their core, should reflect the fact that each employee has individual needs, wants and drivers.