Need to know:
- A wide range of financial issues that many employees struggle with often go unnoticed at work.
- Employers must find a way to tackle the taboo of discussing financial issues among their workforce if they are to understand the needs of employees.
- Employee surveys and constant communication are key to developing an understanding of financial wellbeing issues.
Discussing finances and financial wellbeing is often seen as a taboo in the workplace. However, if employers do not address what are often quite common issues, it can be detrimental to employees’ productivity and mental health. Many UK workers face financial issues on a day-to-day basis; the fallout of which can easily go unnoticed. Examples such as struggling to afford the regular commute to work, addiction, going through a divorce, and budgeting struggles can all add to high financial stress. According to the Financial capability survey 2018, published by the Money Advice Service in March 2019, 39% of adults do not feel confident managing their money, and nearly nine million are in some sort of serious debt.
Unseen financial struggles
Many employees face difficult financial issues, and for employers to tackle wellbeing among their workforce, they must first recognise the unseen issues and myths.
However, there is more to financial wellbeing than many suggest, and employers are not always aware of every issue faced by their employees, says Sam Fuller, managing director of The Wellbeing Project. “There is always the bigger picture; employees, despite what they are earning, may be going through addiction or divorce that heavily impact their financial situation,” she explains.
It can, therefore, be difficult for organisations to recognise the unseen financial issues in the workplace or pinpoint which employees may be in need of support. Rebekah Gerry, financial wellbeing lead at Neyber, says: “One of the main myths is that money worries only affect a certain demographic of people: those who are younger or on lower incomes. Our research over the past four years has shown that’s not true. Across all incomes and ages, there are large proportions who are worried about money.”
Additionally, there is a discrepancy in the understanding of what the term financial wellbeing means. Jeanette Makings, head of financial education at Close Brothers, says: “The common perceptions are being set by providers in the marketplace; they tend to think about people who are struggling to make ends meet, but they are not the only people with issues.
“Every single person will have a unique set of problems that they face. Even if they are on the same income or the same age, they could have quite different financial wellbeing health. It is worth noting that every single person will have a level of financial health; that will be on a scale and there will be a whole range of people among that scale at different stages.”
The employer’s guide to financial wellbeing 2019-2020 research, published by Salary Finance in September 2019, identified that the two groups that have the highest amount of financial worry are those that are paid the least and those that are paid the most. The research concluded that it is not the amount someone is paid, but what they do with the money that determines their financial wellbeing. This could range from spending money on pensions or mortgages, or struggling with long-term addiction.
Support through feedback and communication
There are many things that employers can do to tackle financial wellbeing, once they have opened discussions around the issue. It begins by finding out more about the best way to support employees; enabling a cultural shift to encourage people to be more open about discussing money will involve a mindset shift, says Dhiren Master, global insights director at Salary Finance. “This can take time, but that doesn’t mean it needs to cost a lot,” he explains. “Similarly, choosing the right financial wellbeing benefits for employees takes time, but also doesn’t need to cost a lot. Many financial wellbeing benefits are either free or minimal cost to the employer.”
Neyber’s Gerry adds: “People not only need to learn about how to change their money attitudes and behaviours for the long-term, they also need to be able to access fair products. Providing guidance without a practical solution is also not helpful as many of those who are in financial difficulty are often excluded by high-street banks. However, products without education can be seen as fixing the symptom and not the cause of money stress.”
One option could be to use surveys or assessment tools as a way of garnering employees’ opinions on finance. This can help an employer gather a lot of useful data which can be used to pinpoint exactly how to tackle financial wellbeing, says Darren Laverty, financial wellbeing consultant at Secondsight. “Both education and product ideas are just as critical in consistently discovering issues in financial wellbeing that are often overlooked,” he says.
Employer’s role in financial issues
However, even employers that have the best intentions around aiming to understand the needs of employees who struggle financially, do not need to know everything about the struggles their employees face, says Makings. “Employers don’t need to know everything about their employees to provide physical wellbeing support, such as their [body mass index] BMI or physical condition, so if we compare that to financial wellbeing, organisations don’t need to know the specifics of how every employee is struggling financially,” she explains.
Discussing financial wellbeing solutions and encouraging employees to explore the support, is crucial to solving the cause and breaking down the taboo, says Fuller. “There are a lot of things an organisation can do in terms of education and signposting to bring the conversation forward and give [employees] choices through a combination of resources.
“Over time, there will be more [employees] attending more financial wellbeing sessions more frequently, but in order for that to happen organisations and senior leaders have to talk about it so it’s demystified.”
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