With at least 72% of employees between the ages of 35 and 54 experiencing money worries, financial wellbeing is a high priority. Whether you have a financial wellbeing programme or you’re planning one, here are seven financial wellbeing programme mistakes to be aware of so you can offer the best package to your employees.
What is a financial wellbeing programme?
A financial wellbeing programme should relieve employees’ financial stress by helping them to feel more in control of their money.
The following employee benefits may be included:
- Advice from external financial advisors to help individuals achieve their financial goals.
- Financial education (most people in the UK haven’t been taught how to manage their money).
- Support from ‘money champions’. These are employees in the business who’ve received financial training.
- Financial products such as Openwage on-demand pay, online budgeting tools and money management software.
- Schemes to help reduce costs, such as supermarket discounts, discounted gym memberships, and childcare vouchers.
This list isn’t exhaustive. For more financial wellbeing programme tips, look out for our upcoming about how to support employee financial stability.
Does a financial wellbeing programme benefit a business?
Having a financial wellbeing programme in place benefits employers and employees.
Research by Aegon, the pension provider, revealed that 4 million working days are lost every year due to poor financial wellbeing. In fact, the cost of employees’ financial stress to businesses is staggeringly high.
7 common financial wellbeing programme mistakes
Whether you’re considering how to improve a financial wellbeing programme or you’re starting from scratch, these are some mistakes that are crucial to address.
1. Basing employee financial wellbeing on salary
Money concerns affect everyone, not just people on lower salaries. In fact, various studies show that those earning over £100K are as likely to be worried about money as those on £10 – £14K.
People with higher salaries may have large mortgages or be concerned about tax issues, whilst those on lower salaries may struggle to get by from payday to payday.
Although the challenges are different, financial wellbeing support should be offered to all employees.
2. Not understanding employee needs
Don’t assume you know what challenges your employees face. Involve them in planning a financial wellbeing package so you can tailor your offering to them. Everybody is an individual going through their own challenges.
Your employees might currently be:
- Struggling to pay off a student loan.
- Saving to move house or trying to get back on their feet after moving house.
- Adjusting to the financial demands of parenthood.
- Going through a costly divorce.
- Concerned about having enough money for retirement.
- Worried about escalating credit card debt.
The list is endless. That’s why it’s advisable to find out what your employees need so you can offer the package that’s right for them.
Plus, if employees have been included in planning the programme, they’re also more likely to buy-in and make full use of the support on offer.
3. Not taking a holistic approach
It can be easy to focus on one specific area of financial wellbeing, like savings or pensions. But to achieve true financial wellbeing, employees need support in financial capability and financial education as well.
Nearly a third of employees don’t take financial advice or read information when making financial decisions, according to research by CIPD.
The Financial Advice Market Review study by the FCA published in 2018 revealed that 91% of adults hadn’t taken financial advice in the 12 months before. This shows there’s a clear need for financial education.
A successful financial wellbeing programme includes access to educational resources so employees can learn the skills they need to manage their finances effectively.
4. Not building support
It’s crucial that senior leaders buy into a financial wellbeing programme otherwise nobody else will.
To gain their support, you could share evidence of how good financial wellbeing benefits the business by boosting productivity and lowering rates of absenteeism. When employees aren’t under financial pressure, they’re more ‘present’ at work.
Consider investing in training for senior staff and your HR team so they have the tools to support other employees’ financial wellbeing.
Senior staff need to lead by example, encouraging employees to engage with the financial wellbeing programme and listening to their feedback. By finding out what employees want, the programme can be tailored to meet their unique financial goals.
5. Treating everyone the same
Everybody’s needs are different, and everybody learns in different ways. Some employees may want personalised financial coaching, whilst others are happy to join webinars or be given resources for self-learning.
Aim to provide a choice of ways to access financial wellbeing support so everyone is included.
6. Trying to do everything in-house
Recognise when you need external providers to offer financial wellbeing initiatives. You might partner with an independent, regulated financial advisor or a financial coach who can help your employees to meet their financial goals.
There are some great options available, including on-demand pay from Openwage, which is free for employers.
Openwage has a dashboard for employers so you can manage employees’ access to on-demand pay, plus much more. There’s no impact on your business cashflow and your payroll still runs once a month as usual.
There are a huge number of business benefits of earned wage access as well as significant benefits for employees.
7. Not evaluating results
A financial wellbeing programme that was successful in your business a few years ago might not be as successful today. That’s because people’s financial circumstances change as they go through life and new employees join your company.
A financial wellbeing package needs to be continually evaluated to make sure it’s still meeting your employees’ needs. Act on feedback from employees and make data-driven decisions to make sure your programme is providing effective support.
For example, find out how far your financial wellbeing package is benefiting your business by tracking how rates of retention, absenteeism rates, and levels of productivity have changed since the programme was introduced.
Take a holistic approach
When people suffer from poor financial wellbeing, it affects their physical and mental health too. According to Deloitte, poor mental health costs UK businesses around £45 billion a year.
Taking a holistic approach to workplace wellbeing means employees not only take greater control of their finances, but they feel better generally.
Financial wellbeing at work
Some people wonder whether work is the right place for addressing financial wellbeing, but employers have a unique opportunity.
Employees trust employers with their finances because that’s where their money comes from. It makes sense that financial wellbeing support is provided alongside wages and pensions.
Openwage financial wellbeing support
With Openwage, employees can use a convenient app to manage the money they’ve already earned. They can instantly access up to 50% of their earnings for a low, transparent fee.
Expenses and bills don’t all fall on payday, so being able to access the money they’ve earned when they need it can help ease financial stress. It means they don’t have to resort to loans, overdrafts and credit cards which are becoming ever more expensive with the cost-of-living crisis.
When people feel in control of their finances, it motivates them to take a proactive approach to managing their money, which promotes financial wellness.
So, why not request a demo today? Let us show you how Openwage can improve employee financial wellbeing in your business.