How is your credit score determined?

The UK has the fourth highest percentage of credit card users in Europe. But for many, there are still misunderstandings about how credit data is used. Here we break down how your credit score is determined and what you can do to improve it.

What is your credit score?

Your credit score helps banks, mortgage brokers, and businesses decide whether to lend you money. This includes mobile phone companies and utility providers who give loans in the form of credit when you pay in monthly instalments.

MoneySavingExpert defines it as a score that helps lenders predict someone’s future financial behaviour based on their past financial history.

Having a higher score has many benefits. Before we look at what they are, let’s look at how your score is determined.

How do lenders determine your credit score?

Credit scores are determined from your credit data report. If your credit score is a predictor of future financial behaviour, then your credit report would be like your financial CV.

This report includes your personal details, like your date of birth and home address. It’ll also show information about an individual’s financial past. For example, any outstanding loans, late payments or court judgements.

All three credit reference agencies have different methods of calculating your credit score.  But they will all use the information from this credit report to do it.

What factors contribute to a good credit score?

Knowing what contributes to a good score can help you take control of your credit rating and ultimately your financial future.

We’ve listed the seven most important factors below:

1. Sticking to payment schedules

Surprisingly, a survey by Comparethemarket found that 54% of 16 to 24-year-olds were unaware that a missed payment could negatively affect their credit score.

For this reason, keeping up with payment schedules reflects positively on your credit score.

2. Staying within your credit limit 

Your credit limit is the amount your bank or credit card provider agrees to loan you. This limit can apply to your bank overdraft or your credit card. 

Clearscore explains that it’s a good idea to use no more than 30% of your credit limit. This is because using a higher percentage of your limit signals to lenders that you may be in financial difficulty. 

3. Number of credit applications

Every credit application you make is visible to the next lender. Too many hard credit checks during a short space of time can be damaging to your credit score. 

Global credit reporting agency Equifax suggests asking lenders to do a soft check first. A soft check won’t damage your score or show up on your credit report. 

Soft checks are useful because it lets lenders see if you are eligible for a loan and how likely you are to be accepted before you apply. 

4. Using a credit card for cash withdrawals

Future lenders see frequent cash advances as a sign of poor money management. Using a credit card responsibly can improve your credit. But missing payments or withdrawing cash too often is likely to damage your score.

5. Being on the electoral (voting) register 

Many people don’t realise that being on the electoral roll isn’t just important so that you can vote. In fact, a whopping 72% of young people don’t know that not being on the electoral roll could damage their credit score.

6. Number of previous addresses

Moving too often can negatively affect your credit. Credit agencies such as Clearscore say this is because lenders like stability. Frequently moving (which comes with its own financial challenges) could be taken as a sign of instability. 

Advantages of a higher credit score

When lenders determine your credit score as high or good, there are lots of benefits for you. Here are some of them:

1. Unlock more sources of credit

Provided we approach loans responsibly, having access to credit at the best rates of interest can help achieve certain financial goals. Having a good credit score can help open the door to funds that can help you make empowering decisions. 

2. Pay less interest

A higher credit score means loan providers see you as low risk and can give you better rates of interest. This could result in substantial savings as you’ll pay less interest than someone with a lower credit score.

3. Pay less for your car insurance

If you pay your car insurance monthly, it’s considered a credit agreement and the provider will run a hard credit check. A better credit rating can be a factor in helping you get a lower monthly premium for your insurance.

4. More choice with your mobile phone contract

A monthly contract is also a credit agreement and phone providers run credit checks before offering deals. A higher score can mean a better deal.

5. Pass landlord checks more easily

Landlords sometimes run credit checks. Having a higher score generally indicates to landlords that you are a less risky tenant when it comes to paying the rent on time.

6. Negotiating power

A higher credit rating gives you the power to negotiate. You’re in a better position to ask for a better interest rate or an increased credit limit.

Seven tips to improve your credit rating

Now we know what the benefits of a higher credit score are. Let’s look at ways to get you there.

We’ve collected the best tips from Experian, Clearscore and Equifax to help you be in the best possible position for when your credit score is determined. 

1. Proof of address

If you can, make sure you’re on the electoral roll (being registered to vote).

If you’re not a UK citizen, there’s a solution. Ask all three credit agencies to add a note of correction to your report. This tells potential lenders that you can provide proof of address through a utility bill or driving licence.

2. Make regular payments on time

Consider setting up direct debit payments so that you never miss a payment for things like credit cards. You can always set up a minimum and then pay more if you can.

3. Keep credit utilisation low

Generally, you should aim to use no more than 30% of the credit available to you. While there is no definitive answer to how many credit cards you should have, it’s worth considering only having as many as you can responsibly manage.

4. Consider boosting your credit score

Experian offers a free service called a credit boost which Forbes magazine says can be useful for those with a thin credit history.

The credit boost with Experian means it looks for examples of responsible financial behaviour. It then adds this information to an individual’s report for future lenders to see. 

Examples of responsible financial behaviour include digital subscriptions and council tax bills which are not normally included on an individual’s report and therefore don’t normally count towards their credit score. 

5. Check for fraudulent activity

Fraud alerts damage your credit rating and are potential red flags to lenders. Experian explains how these alerts can be easily removed.

Even a typo or misspelled name can affect how your credit score is determined, so check all your personal information is correct.

6. Keep old lines of credit open

Old, well-managed credit cards usually improve your score because lenders see lines of unused credit open. So consider keeping your old bank account or credit card even if you no longer use them.

7. Consider getting a credit builder card

People with thin credit files can use credit building credit cards to help them build up their credit rating. By proving financial responsibility with well managed regular payments, users may have access to better rates of interest.

8. Remove negative data

If you have any County Court Judgements (CCJs) on your report, credit agencies like Experian explain how to get them removed or set aside. Once removed, it no longer negatively affects how your credit score is determined.

What if I have poor credit?

If you have a low credit score or a thin credit report, the good news is that you can improve it.

Poor credit doesn’t mean you can’t borrow money or get a mortgage. Secured loans, personal loans, and guarantor loans are some alternatives.

Another option is payday loans, although many people are realising that on-demand pay (also called earned wage access) is a safer and more cost-effective option.

Using on-demand pay from Openwage doesn’t damage your credit score because there are no credit checks carried out and it won’t show up on your credit report either. That’s good news for your credit rating.

A good credit score can unlock more opportunities

There are simple things you can do to improve your credit rating. Knowledge is power, so it’s a good idea to know what can negatively and positively affect your credit score so you can make the right decisions. 

As a final note, when lenders determine your credit score, they check many things. Some of these will show up on your credit report, so it’s worth considering checking your own credit report regularly using one of the three credit reference agencies. 

The information in this article is for general information only. It does not constitute professional advice from Openwage. Openwage is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information in this document relates to your unique circumstances.

What is employee offboarding and why does it matter?

Most HR teams put significant effort and planning into the onboarding process. Meanwhile, offboarding gets much less attention. However, there are some worthwhile benefits to getting onboarding right. Read on to find out what employee offboarding is and why it’s so important.

What is employee offboarding?

Offboarding is when an employee transitions out of an organisation. This can be the result of many reasons, many of which are not under the employer’s control. 

In this article, we’ll be discussing the importance of having a clear strategy for managing this separation process and how your business can benefit from it. 

What’s the difference between offboarding and onboarding?

Onboarding comes at the beginning of the experience, after the hiring process, while offboarding ends it.

Defining what employee offboarding is wouldn’t be complete without looking at where it fits in the bigger picture. This begins by recognising that the process of an employee’s departure is just one stage of the employee life cycle.

When this life cycle runs smoothly, it contributes to the wellbeing and cohesion of your workforce. Onboarding and offboarding are both essential if you’re going to create a streamlined and positive employee experience. 

Offboarding is a crucial part of the employee life cycle

The employee experience involves six distinct stages. Each phase of this experience is important and makes up the entire life cycle of the employee at your company.

There are six distinct stages to this cycle:

1. Attraction
2. Recruitment
3. Onboarding
4. Development
5. Retention
6. Offboarding

Most organisations spend considerable time and money on the onboarding process. That’s because they realise that integrating new employees into the company culture and vision is an investment. 

By investing time and energy into welcoming new employees, it helps create a sense of belonging for them. This process helps to create happier employees that are more productive.

Why invest in employees when they’re leaving?

It’s easy to see why investing in an optimised onboarding process pays off. But why invest in an employee who’s on their way out? 

Aberdeen Research found that only 29% of companies have an offboarding strategy. So you might be asking, is it worth it? 

The answer might not be immediately obvious, but delve a little deeper and the benefits become clear. So, now that you know what employee offboarding is, let’s look at the advantages it offers.

Why is offboarding good for business? 

A big part of ensuring employee wellbeing is investing time in creating a streamlined employee life cycle, one which includes a good exit strategy.

The link between wellbeing at work and productivity is clear. An Oxford University study found that happy, healthy employees are 13% more productive. 

In short, understanding and planning for the entire employee life cycle is an excellent way to improve retention, morale, and return on investment on new hires. Offboarding is an integral part of this life cycle.

Now let’s take a look at the six ways that offboarding brings long-term benefits to your business.

1. Optimise Offboarding to boost morale and improve employee experience

The offboarding process is not only experienced by the employee leaving. It’s also carefully observed by the whole team – some of whom may be considering leaving themselves. 

When employees leave, it creates uncertainty for those staying

When an employee moves on, it can create a good deal of uncertainty among other team members. Managers have worked hard to create team cohesion and departures can throw unity off balance. 

For this reason, a weak offboarding strategy can negatively affect the morale and confidence of your whole workforce.

A good offboarding strategy will ensure early communication with other team members. It will also offer them reassurance and a strategy as to how duties will be transferred or managed among the remaining team members. 

Knowing that projects will continue to run smoothly, even though that key person is leaving, is crucial to preventing a dip in performance and productivity.

If you value employee wellbeing, carry that through to the very end

A defined employee exit strategy also contributes more broadly to your organisation’s culture of wellbeing. As research from Gallup confirms, a robust culture of wellbeing contributes to engagement, retention, productivity, and a reduction in absenteeism.

Forward-thinking organisations want to provide a consistent experience throughout the employee life cycle. When an employee leaves in bad faith, it affects everyone.

2. When you offboarding strategically, you gain valuable data insights

Offboarding is an ideal opportunity to gain valuable feedback from the employee leaving. This data could just prove critical to the organisation’s success.

According to LinkedIn, companies that fail to listen to feedback from employees can suffer from loss of revenue and reputation.

Surprisingly, 52% of exiting employees say their company could have done something to prevent them from leaving. But far too often, the organisation finds out too late or not at all. Understanding the 10 things your employees want but don’t always ask for is an important tool for helping to prevent this.

Gain insights through exit interviews 

Use exit interviews to get honest feedback from your employees. Having access to these insights can help you tweak and improve your recruitment strategy.

Data from exit interviews offers great insights to help increase retention. They may provide incredibly valuable insights that are invisible to leaders. 

One of the best ways of acquiring this data is through the offboarding exit interview. This is one of the components of the checklist for developing your onboarding strategy. We’ll include this checklist in another article.  

Acting on feedback you receive from exiting employees can lead to cost savings, increased morale, and many other positive outcomes. 

3. Leaving the door open to employees creates a no-cost pool of talent 

In the current tight labour market, most organisations have all eyes on their recruitment strategies. Yet this recruitment strategy is sometimes overlooked. 

If an employee leaves on good terms, then it’s just possible that they will consider returning to that organisation later. Research has found that 40% of employees would consider returning to a company where they have already worked, while 15% have already done so.

Closing the employee life cycle off on a positive note contributes to a good employee experience. Onboarding means you’re keeping the door open for potential future hires, also called boomerang employees. 

Boomerang employees are ex-hires that are recruited again in the future when the right opportunity shows up. They represent a potentially untapped pool of talent for hiring managers and, according to LinkedIn, contributed to 4.5% of all hires in 2021.

4. Reduce cyber risks with effective offboarding

Another reason that offboarding is so important is because being without an exit strategy puts your company at risk of data breaches. 

According to TechRepubic, 48% of businesses are aware that former employees still have access to corporate networks. A further 20% say they’ve experienced a data breach because of this.

When data breaches happen, the stakes are high

In 2018, a US-based organisation, Pagosa Springs Medical Center provided a real-world example of how poor offboarding can have serious security consequences.

Because of a weak offboarding process, a former employee retained access to electronic patient information. The medical centre had to pay fines totalling $111,400.

Good offboarding helps prevent data breaches when an employee moves on. For this reason, a robust offboarding strategy is essential for compliance.

5. The right offboarding process enhances your reputation

Previous employees can be a fantastic representation of your employer brand. On the other hand, disgruntled employees can do a lot of damage.

As research by Gallup confirms, your employee experience is your brand. Employees who leave your company with a positive experience are 2.9 times more likely to recommend your organisation as a place to work.

Not every separation is a happy one, but you can make sure you have a clear protocol in place that ensures the departure is as positive as possible.

You want ex-employees to speak highly of their time with you. They could send the perfect candidate your way later down the line. Given that attracting and retaining talent is one of HR team’s biggest challenges, it makes sense to do everything possible to help boost those figures.

Leave a lasting impression and your investment will pay off

Offboarding is an essential part of the employee life cycle and a robust offboarding strategy can positively impact your bottom line. There are many ways to optimise your offboarding strategy to gain maximum benefits when someone leaves your organisation.

Pros and cons of unlimited annual leave as a benefit

High-profile global employers like Goldman Sachs, LinkedIn and Netflix have introduced unlimited annual leave for their employees in the UK. Yet, this policy is widely controversial. Here we look at the pros and cons of unlimited annual leave to help you decide whether it’s right for your business.

What is unlimited annual leave and how does it work?

Unlimited annual leave is when a company doesn’t give its employees a set number of days to take as holiday each year. In effect, the company lets employees decide how many days’ holiday to take.

The days they take aren’t counted. It’s not like unpaid leave because all holidays are paid as normal.

The legal minimum annual leave allowance for most employees in the UK is 5.6 weeks, under the Working Time Regulations 1998. Employers can offer more days than the statutory minimum, but not fewer. 

There’s evidence that employees take less annual leave when there’s no limit

At the moment, unlimited holiday entitlement is more popular in the US than the UK. That’s probably because there’s no statutory holiday entitlement in the US so some companies don’t offer much in the way of annual leave allowance. 

Statutory annual leave exists to prevent employee burnout and protect mental wellbeing. So, if the unplanned consequence of unlimited annual leave is that people end up taking less holiday, that’s an issue that companies should address.

Are unlimited annual leave policies open to abuse?

You might think that introducing unlimited annual leave will lead to employees taking far more than their statutory holiday entitlement. So does that mean that one of the big cons of unlimited annual leave policies is that it’s open to abuse?

On the other hand, what if employees take too few holiday days? When an unlimited annual leave policy was trialled by CharlieHR, an HR consultancy in London, that’s exactly what happened. We’ll come back to their story when we cover some of the main pros and cons of unlimited annual leave.

Why is this policy relevant now?

Unlimited annual leave is particularly pertinent now because employers are becoming increasingly aware of their employees’ mental wellbeing and promoting a healthy work-life balance.

The cost-of-living crisis, COVID-19, and the instability of the world are issues that play on everybody’s minds. On top of this, many people are working longer hours today than they were pre-pandemic. 

So it’s not surprising that stress-related absences from work are rising. With employee burnout rates on the up, many businesses are introducing company-wide mental wellbeing breaks to help address the issue.  

Employees want a better work-life balance more than ever

Lockdowns brought into sharp focus the value of relationships and spending time with loved ones. In 2022, 24% of workers plan to leave their jobs in search of a better work-life balance.

Unlimited annual leave has been introduced by many businesses against this background. It allows people to rest and recharge for as long as they need, and it’s an extension of the flexibility today’s employees want. 

Unlimited annual leave is very important for attracting and retaining top talent and it could lead to more productive employees.

How does annual leave affect employees’ mental and physical wellbeing?

Working long hours has a detrimental effect on both physical and mental wellbeing. A study into the effect of long working hours and overtime on occupational health showed that long hours are linked to depression, poor sleep quality, and excessive alcohol consumption.

Work fatigue also raises the risk of cardiovascular diseases. Working long hours is one of the biggest causes of employee burnout.

Annual leave is essential for people’s health and morale, and consequently for the health of a business. Back in 1926, Ford discovered that well-rested workers were more productive over a shorter length of time than those who worked consistently long hours.

What are the pros and cons of unlimited annual leave?

Here are some advantages of unlimited annual leave:

1. Well-rested employees are more productive

After introducing unlimited annual leave, software company Kronos had a “great year for financial results”. They believe unlimited annual leave has led to happier, more engaged employees, which has increased productivity. 

Kronos employees can take the time off that they need without worrying about using up their holiday entitlement. A study by the University of Oxford backs Kronos’ findings by revealing that happier workers are 12% more productive.

2. People don’t take excessive annual leave

Kronos and Mammoth HR (who’ve also introduced an unlimited annual leave policy) found that people generally take the same amount of holiday as before, or just a day or two extra.

3. Where there’s trust, there’s loyalty 

By granting unlimited annual leave, a business shows that it trusts its employees to get their work done and plan their holidays considerately. CEO of Kronos, Aron Ain, points out that a business should only hire employees it trusts in any case. 

The Harvard Business Review found that trust has a huge, positive impact on employee loyalty. A big benefit for Kronos was their staff turnover rate, which went from 6.4% to 5.6% after unlimited annual leave was introduced.

4. Unlimited annual leave is an attractive perk for candidates

Before introducing unlimited annual leave, Kronos had 300 vacant positions they couldn’t fill. CEO Aron Ain says the policy has been “successful so far” in helping them to attract the right talent to their business.

What are the disadvantages of unlimited annual leave?

1. Fear around taking too much holiday could create a culture of burnout

As there’s no limit to the amount of holiday employees can take, they may worry about taking too much. People might feel guilty about their colleagues taking less time off. 

A big anxiety for some employees is that by taking time off, their employer will see them as not committed to their job. As a result, there’s a lot of fretting and second-guessing involved, one of the big cons of unlimited annual leave policies. 

Perhaps that’s why a number of companies, including CharlieHR and Buffer, noticed that their employees were actually taking fewer days when they could choose how many holiday days to take.

Buffer gets round the issue by specifying a minimum number of days’ holiday every employee must take. They also lead by example by encouraging their senior leadership team to visibly take time off. For instance, Buffer’s CEO shared that he’d taken 14 days off to go travelling.

2. No set days means no unused days when employees leave 

When an employee leaves a company or retires, they’re typically (but not always) paid for any holiday they haven’t used. With unlimited annual leave, there’s no set number of days. This means no unused days for employers to repay the employee leaving.

You could argue, however, that annual leave is supposed to be taken. The whole point of annual leave is to ensure employees rest for the benefit of their mental and physical wellbeing. 

3. It can harm team camaraderie 

CharlieHR found that because some people were taking more annual leave than others, those who took less holiday were taking up the slack. This meant some people became overworked and resentful. 

CharlieHR also found that those on higher salaries took more time off than those on lower salaries. They put this down to the fact that those with a larger pay packet could afford to go away on holiday more often.

To address this issue of inequality, the tech giant Evernote, who’s also introduced unlimited annual leave, gives each member of its staff a $1,000 budget to travel. This is so all their employees “feel valued and empowered.”

Benefits and perks help keep employees motivated

When thinking about the pros and cons of unlimited annual leave, it naturally leads to the broader discussion around which benefits employees value most.

This right mix of benefits and perks promotes a workforce that’s happier, less stressed and more motivated. The Rewards Report found that 82% of staff who felt motivated at work received perks and benefits. 

When a company genuinely cares for its staff, productivity increases. That’s because people take less time off sick and stay with the business for longer. Plus, the company is more able to attract the right talent. 

Having enough downtime from work is essential for people’s physical and mental wellbeing. When people are refreshed and free of stress, they perform at their best. 

Research from CIPHR found that most people they surveyed would prefer extra holiday allowance to unlimited holiday allowance. So that’s food for thought when weighing up the pros and cons of unlimited annual leave. 

Physical and mental wellbeing is linked to financial wellbeing

Openwage is a financial wellbeing benefit that gives your employees instant access to a portion of their earnings whenever they need it. With anxiety about money is rising, on-demand pay can help ease financial stress. 

It does this by giving employees the confidence that they can cover unexpected costs that fall between paydays without emptying their savings or resorting to expensive credit.

Please contact us today to hear how on-demand pay can promote your employee’s financial wellbeing.

Are work from anywhere policies the key to recruiting in 2022?

Lots of businesses have introduced a ‘work from anywhere’ policy as a natural extension of flexible working arrangements. If you’re wondering how to recruit post-Covid and retain the best employees in a recruitment crisis, a work from anywhere policy is worth exploring. 

What is a work from anywhere policy?

A work from anywhere policy (WFA) is a work policy that allows employees to work from any location they choose for part of the year. This could be somewhere in the UK or sometimes abroad, depending on the specifics of the policy.

Which companies offer a work from anywhere policy?

Work from anywhere policies are becoming more common. Here are examples of some of the big players who are already allowing their employees to work from anywhere:

Airbnb

Airbnb announced a WFA policy in April this year and it’s the core of their recruitment strategies for 2022. They see it as an evolution of the flexibility people already have in their working lives post-COVID.

Amazon

Amazon permits their employees to work from anywhere, provided they can reach the office for a meeting at a day’s notice. This makes Amazon’s WFA policy a little more unique.

American Express

American Express allows their employees to work from anywhere they like for four weeks of the year or more.

Dropbox

Dropbox employees can work from anywhere, but they must be available for virtual collaboration when time zones overlap.

Meta 

Meta, the parent company of Facebook, introduced a work from anywhere policy. This was designed to persuade employees who are considering leaving to stay instead.

Shopify

Shopify’s tagline is: “Work from anywhere. Organize your work and life in a way that’s energizing and purposeful for you.” We like this one, because it really puts the individual at the heart of the policy.

Siemens

Siemens allows their employees to work from anywhere for two or three days a week. 

Spotify

Spotify offers their employees the opportunity to work from anywhere. This is because they believe work culture should be built on “trust, communication, collaboration and connection, and acknowledging that we’re all individuals with different needs.”

What are the advantages of a WFA policy for employers?

Measuring impact, not time

Today’s employees want to feel trusted to manage their own time, and that includes when and where they work. They want their value to be measured by what they accomplish rather than the number of hours they’re in the office.

Balancing personal commitments

People don’t want to work for a business where they feel anxious when they have to balance personal commitments with work. This could include attending a school play or taking a relative to hospital. 

Today’s employees want to develop a routine that suits them and allows them to complete their work. A work from anywhere policy is an extension of the flexibility people already need from their employers.

Putting lifestyle before work 

When people can work from anywhere, they can spread their wings and go travelling. 

They can move house permanently to somewhere they’ve always wanted to be even if it’s far from the office. If they need to relocate to be nearer elderly parents, or move to improve their family’s lifestyle, they can.

Allowing employees to work anywhere shows that a business understands and cares for employee wellbeing. This boosts loyalty and motivation, which increases productivity and reduces employee turnover. 

What are the disadvantages of a WFA policy for employers?

A work from anywhere policy can present challenges to overcome, such as:

Greater risk of burnout

People can find it difficult to separate work and home life when they’re not in an office. They may even work more hours because they’re not confined to an office schedule. 

Often, employees decide to work where they would normally go on holiday. This further blurs the line between work and relaxation.

Health and safety issues

In an office, desk spaces are set up to help protect employee health and safety, for example, back and neck conditions. If someone is working from a laptop on a couch in an Airbnb, this could pose a health risk. 

Employers have a legal obligation to ensure their employees work in a safe environment. This becomes challenging when the employer isn’t present to put preventative measures in place to mitigate these health and safety risks.

Loss of productivity

Employees who thrive in a busy office environment may not find it that easy to work somewhere else. Highly sociable employees may feel isolated when they’re not with their colleagues. 

This can lead to employees becoming demotivated and less productive because they need the buzz of the office or their colleagues to thrive. 

Protecting sensitive information

When people aren’t working in an office, it can be more challenging to protect confidential company information and personal data.

This is even more of a consideration when people are travelling from place to place with information stored on a laptop.

A WFA policy has other practical difficulties for employers. We’ll cover these later in the article.

How can a WFA policy help with talent attraction?

In the UK, we’re in the middle of a recruitment crisis. If you’re wondering how to attract talent, a work from anywhere policy could be the answer, together with other candidate attraction strategies like perks and benefits.

The pandemic has led many people to re-think their priorities and look for a better work-life balance. A study by Microsoft found that 71% of employees want flexible working to continue into the future.

Businesses that know how to find candidates and attract talent in a competitive jobs market are embracing changes like WFA, which give them an edge. 

WFA policies help you go after the cream

A WFA policy gives a business access to a greater pool of talent. That’s because the best employees don’t just live where a business is located. 

All organisations know that hiring the best employees is critical to success. The late Steve Jobs, founder of Apple, advised employers to:

Explosion of interest with Airbnb’s work from anywhere policy 

When Airbnb introduced a work from anywhere policy, more than 1 million people visited the jobs page on their website. 

Airbnb CEO, Brian Chesky, believes this is because the policy “struck a chord” with people who already look for flexibility in their work. He sees work from anywhere as vital to recruitment strategies for 2022, since it’s “where the world is going” anyway. 

Chesky thinks Airbnb’s WFA policy is successful partly because they don’t adjust salaries based on location (like some other big tech companies do). Since they’re all competing for the same talent, this has given Airbnb an advantage.

Airbnb decided to offer their employees the chance to work from anywhere because they realised this flexibility saved their business during the pandemic. 

Brian Chesky said, “We wouldn’t have recovered so quickly from the pandemic had it not been for the millions of people working from Airbnbs.”

What do WFA policies mean in practice?

Here are some practical matters to consider if you’re considering introducing a work from anywhere policy:

Employment contracts

Employment contracts may need to be adjusted when a WFA policy is introduced because terms and conditions are likely to change. 

Perks and benefits may also need re-thinking. For instance, if you offer discounts at local gyms and supermarkets, this will no longer be a valuable incentive.

Face-to-face meetings

Many businesses want their employees to meet in-person once in a while. This could prove difficult for employees who are a long distance away. 

Research by Forbes found that most executives think face-to-face meetings build stronger business relationships. Airbnb addresses this issue by giving their employees plenty of notice so they can plan ahead.

Payscales

For businesses that adjust pay based on location, a WFA policy may present a challenge. It will no longer make sense to match pay to location. 

That’s because there’s no requirement for employees to be rooted in a place where the cost of living is relatively high or low. This means increasing pay for employees who receive a lower wage because of where they live.

Tax and social security 

When people work in different countries, tax can become complicated. Even though someone is working for a UK company, they may still have to pay tax in the country where they’re located, especially if they live there for over six months. 

Employees who don’t have to pay tax overseas may still have to pay social security in the country they’re working with. Even though they may already be paying National Insurance in the UK.

Time zones

When employees are working in different time zones across the world, the practicalities of video calls will need to be addressed, and an agreement reached. 

Workforce cohesion

A WFA policy could create a sense of unfairness if there are roles within a business that must continue to be office-based. A cultural split could emerge between location-based staff and those with flexible lifestyles, so they no longer work cohesively together. 

Visas

Some countries allow people to work remotely on a tourist visa, but others don’t. Every country has different rules. The penalties for violating the terms of a visa can be harsh, so it’s very important to check. 

The visa issue can be especially difficult if a person travels to lots of different countries. Some countries have special visas for working tourists.

Is a WFA policy right for your organisation?

Deciding whether a work from anywhere policy is right for your organisation is an individual decision. Where in-person employees are fundamental to a business, then it clearly isn’t feasible.

For businesses where WFA is possible, there are many advantages. Yet lots of companies don’t introduce WFA because of the practicalities involved. 

This means that if you do decide to offer WFA, as well as being beneficial for your existing employees, it could give you a significant advantage over your competitors who are recruiting from the same talent pool.

What is a credit check and why is it important?

A wide range of financial products and services involve a credit check, meaning you may be subject to a credit check more often than you think. We’ll take you through what a credit check is, who does them, and why they’re important to help you manage your finances more effectively.

What is a credit check?

According to HSBC, the definition of a credit check (or a credit search, as it may be called) ‘is when a company looks at your credit report to see your financial history.’

So what is a credit report? Your credit report is your credit history and credit activity. It will show any credit products you have had in the past, what you owe currently (if anything) and what your behaviour is like when it comes to making payments on time. 

This is also called ‘credit worthiness’.

How do credit checks work?

It’s important to know that there are two main types of credit check; soft credit checks and hard credit checks. Let’s go through each of these and how they differ. 

Soft credit checks

A soft credit check is typically used to show your likelihood of being accepted for a loan, credit card, or other financial product. Also known as a soft search, this type of check is generally used by lenders so they can offer you a personalised quote.

A soft credit check provides a snapshot of your previous dealings with lenders and how you deal with your finances. It doesn’t provide the same level of detail as a hard credit check. 

The advantage of a soft credit check is that it isn’t visible to other lenders (although it is visible to you if you look at your credit file). This is sometimes called a ‘credit footprint’.

In this case, soft credit checks don’t leave a footprint, but hard credit checks do. If a company does a soft credit check on you, it’s unlikely that it will hurt your credit score.

Hard credit checks

Also known as a full check, a hard credit check is when a lender looks at everything that your credit report contains. 

While a soft check may have been used to provide an initial quote, a hard credit check is used before any final lending decisions are made.

A hard credit check leaves a footprint on your credit file and this means that it can be seen by other lenders. The footprint is typically visible for around 12 months. 

Multiple hard credit checks on your credit report can happen when you apply for multiple lines of credit in a short time. 

What happens if I apply for multiple credit cards?

For example, say you apply for a credit card. Perhaps while you’re waiting for a decision on that, you apply for a different credit card, thinking you’ll be successful. In this type of situation, multiple companies are carrying out hard credit checks on you. 

This can be a red flag for lenders because, by applying for multiple lines of credit at once, they could think you’re in financial trouble. That makes you at higher risk of missing repayments. 

As a result, the lender may reject your application or offer you the product for a higher interest rate.

The reality is that lots of people do have more than one credit card, but chances are they applied for them at different times. We’ve written a useful article about the right number of credit cards to have.

Who does credit checks?

There are lots of situations when an organisation or agency will do a credit check. Let’s look at some of these:

Banks

When you apply for a new bank account, the bank is likely to check your credit. This allows them to confirm who you are, but it also gives them more information about your history of credit. 

Mortgage providers

A mortgage is often the biggest debt that anyone takes on. It makes sense that before lending such a large sum of money that a mortgage provider would want to carefully examine your financial history and credit score first. 

Creditors and lenders

If you’re applying for a loan or credit card, the company needs to know that you can make the repayments. Some buy now pay later providers also carry out credit checks.

They look at your past behaviours as a way of determining this. Your financial behaviours will help them decide if they want to lend to you and how much they’re prepared to lend. 

Payday loan companies are a good example here. We’ve outlined six key things you should know before applying for a payday loan.  

Potential employers 

If you’re applying for a job where you have responsibility for large sums of money or high-value assets, an employer may carry out a credit search. A poor or bad credit score may suggest financial difficulties and could put your application at risk.

Utility companies 

Unless you’re using a pre-pay gas or electricity meter, companies that provide gas, water, and electricity are providing you with a line of credit. These companies send you a bill after you’ve used that gas, electricity or water. 

This means that they may want to assess your ability to make payments when you move into somewhere new.

Landlords and letting agencies

If you’re looking to rent a home, your landlord needs to know that you’re capable of keeping up with your payments. A credit search allows them to explore this.

Government agencies

If you’re responsible for making child support payments or are applying for certain licences, government agencies may access your credit report.

Why your credit score matters 

You have more than one credit score. This can be confusing, so let’s explain how credit scores work.

In the UK, there are three credit reference agencies. Each agency uses different methods of assessing people and so you’ll have a different credit score with each.

The three credit reference agencies are:

• Experian
• Equifax
• TransUnion

Why are credit checks important?

When you look at the number of organisations that use credit searches as part of their decision-making process, it’s clear that the contents of your credit file really matter.

A soft credit search can help you get pre-approved for a range of financial products or it can stop you in your path.

Even when you get past the soft credit check, there is then the hard credit check to consider. If this highlights behaviours that suggest that you can’t effectively manage your finances, then it could harm your chances of being approved or getting a low interest rate.

Credit scores can help protect poeple

The theory behind credit scores is to help someone negotiate a lower interest rate. They can also help protect people from over-borrowing. That’s borrowing more than they can comfortably afford to repay.

Why is your credit score important?

Credit reference agencies typically assign a credit status to everyone for example poor, average, good, or excellent. They also assign you a number (known as your credit score).

If you have a good credit rating, you’ll have a higher credit score (a higher number). People with a good credit rating typically find it easier to secure credit compared to someone with a poor credit score.  

This means that if you know you have a poor credit score, you can take action to help improve it and increase your rating. The payoff for that work can be very beneficial.

This can include being able to access lines of credit previously unavailable to you. Or being given better interest rates than those with poorer credit scores.

How to get small amounts of cash without a credit check

Millions of employees find themselves short of money in the run up to payday. That’s because the timings of when employees are paid and when their bills come out don’t always match up. 

Wouldn’t it be great if you could access your earnings without waiting for payday?

Get paid before payday without a loan or interest to pay

That’s exactly what on-demand pay is. It’s an app that lets employees access some of their wages before payday. It’s quick and affordable and importantly, there are no credit checks.

On-demand pay can be a great way to pay for an unexpected bill without resorting to expensive credit cards, overdrafts or payday loans. Find out more about on-demand pay. 

The information in this article is for general information only. It does not constitute professional advice from Openwage. Openwage is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information in this document relates to your unique circumstances.

Help with cost-of-living crisis: What companies can do

The rise in poverty among working people has risen dramatically and today one in eight workers are struggling to make ends meet. Here, we explore how employers can provide support to workers and help with the cost-of-living crisis, while also building the financial resilience and wellbeing of their employees.

Crisis point for employees

According to a survey by Which?, one in five Britons today have to borrow money to buy daily essentials. Soaring food, energy and petrol prices have left 77% of us feeling extremely worried.

These higher levels of anxiety and financial insecurity have a negative impact on the workplace. Higher absenteeism and turnover, lower productivity, and performance.

The impact of financial stress on the workplace is staggering. Now, it’s more important than ever for employers to help with the cost-of-living crisis.

Promote the wellbeing of your workforce

As well as helping to protect your workforce from increased financial stress, investing in employee wellbeing delivers some serious business benefits:

1. Better performance and productivity.
2. Higher retention rates.
3. Lower absenteeism.
4. Lower staff turnover.

Today, most employers understand that the wellbeing of their workforce is not just ethical, it’s also good for business.

We’ve listed 10 ways you can help with the cost-of-living crisis and create more resilience in your business.

1. A decent wage

In the public sector, the cost-of-living squeeze has seen the UK experience some of the biggest strikes in three decades. With inflation and the cost-of-living soaring, salary increases have not kept up.

A recent survey found that more than half of Britons cannot cope with their current salaries, and unions are encouraging the Government to fund an above-inflation pay rise.

A pay rise is one way that employers can promote financial wellness among employees. In the private sector, several well-known names have done this.

Lloyds Bank, for example, gave 99% of its workers a 3.6% pay rise. Supermarket chains, Morrisons, Lidl, and Marks and Spencer’s have all also raised salaries in response to the crisis during 2022.

However, not every business can afford to increase salaries. So let’s look at some other ways companies can support employee wellbeing through the cost-of-living crisis.

2. Create rewards packages that include benefits in kind

In place of driving up fixed pay costs, some employers are increasing their investment in employee benefit plans. These longer-term investments typically improve company culture and employee experience, and help support your workforce as the cost-of-living soars.

Platforms such as Perkbox offer rewards and discounts for employees that can add up to hundreds of pounds each month. Discounts on days out, cinema tickets, and meals can be invaluable to households that are struggling.

Benefits and Rewards teams can also consider expanding salary sacrifice schemes. Even though an employee will take home a little less pay at the end of the month, the benefit received is far cheaper than purchasing it outside of the scheme.

Childcare support vouchers, health insurance, and pension schemes are the most well-known non-cash benefits. These types of benefits in kind can help ease employees’ financial struggles. 

3. Give employees a cash lump sum

Instead of a wage increase, some companies are choosing to give employees a lump sum to help with the cost-of-living crisis. 

Earlier this year, Lloyd’s Bank offered £1,000 to all its workers and Rolls Royce chose to support employee financial wellbeing with a lump sum of £2,000.

While a cash lump sum from employers is arguably a temporary financial boost, it does demonstrate to employees that an organisation cares about the financial health of employees.

4. Support employees to access government benefits

Up to 7 million people in the UK are missing out on benefits they are entitled to, and many of these people are in full-time work.

Some employees may assume that because they are in full-time work, they are not eligible for government support. However, universal credit is for people in and out of employment. 

Single-parent families, carers, and employees who are renting and have childcare costs may be eligible for financial help. There are lots of ways that employees can check they’re getting the right entitlements.

As an organisation, you can support your employees by providing an Employee Assistance Program (EAP). EAPs are typically a phone helpline that employees can call when they have a personal problem that’s affecting their work. 

There are many EAP providers, and most packages of support vary a little. Some key areas of support that EAPs focus on are professional counselling, practical and emotional advice, and signposting to other organisations for more specialised support.

5. Provide mental health support

There is a strong link between mental health and financial wellbeing. 

When people are experiencing financial stress, they’re more likely to suffer mental health problems. Conversely, when someone is experiencing mental health issues, they’re more likely to experience financial stress. 

Talking about financial difficulties or debt is a difficult subject for most people. While 83% of people are affected by soaring food, energy, and petrol prices, 46% still feel uncomfortable talking about it.

Most companies now offer employees some level of mental wellbeing support, typically through EAPs.

But with new challenges emerging like the cost-of-living crisis, increased burnout rates, and difficulties in disconnecting when working from home, some employers are taking additional measures.

• Regular check-in with workers and ask them how they are doing. 
• Encouraging more social connectivity through in-person gatherings. 
• Open discussions, webinars and workshops supported by mental health practitioners.
• Mental health days off.

6. Recognise the importance of financial wellbeing 

According to the CIPD, one in four employees say money worries affect their ability to do their job. Employees with low levels of financial wellbeing can have a serious impact on your business. 

Organisations that recognise the detrimental impact of financial worries are implementing robust financial wellbeing strategies. 

An effective financial wellbeing strategy aims to ease financial stress by providing rewards, benefits, resources, and support to help meet employees’ financial needs.

Some common components of a financial wellbeing strategy include:

• Earned wage access (also called on-demand pay)
• Financial coaching 
• Pension schemes
• Budgeting and savings support 

Not only are financial wellbeing strategies useful for your workforce during the cost-of-living crisis, they can also be a useful tool in recruiting and retaining employees.

Consider taking a deeper dive into financial wellbeing to understand the importance of financially well employees for your organisation. 

7. Be flexible in how your employees work

Stay open and promote communication with your workforce. Perhaps some of your employees would benefit from a cycle to work scheme? 

Ditching the expensive, petrol-reliant car at this time may help ease financial hardship. You won’t know this unless everyone talks openly about the problems and potential solutions.

Being flexible in where your employees work can also help ease financial stress and help with the cost-of-living crisis. For some, working from home helps them save money they would otherwise spend on commuting. 

Some companies, like Airbnb, are launching the next generation of work from the work from home (WFH) policy. They’re called work from anywhere (WFA) policies. This gives employees the freedom to live in an area with a lower cost of living. 

8. Explore the option of allowing staff to sell unused annual leave

Aviva made the headlines when they launched a policy that allows employees to exchange unused annual leave for extra salary. This can be a useful way to ease financial strain. However, it is also a controversial one.

While selling unused annual leave has reportedly been a success for Aviva, there are plenty of critics of selling annual leave. Encouraging workers to take a break is one of the most important ways to avoid burnout in the workplace. 

Many fear the ability to sell unused annual leave could lead to an increase in burnout, which is detrimental to employees and businesses. It’s up to organisations to assess the suitability of this type of policy based on what they already know about their employees.

How Openwage can help during the cost-of-living crisis

There is no doubt that financial resilience is more important than ever and offering support to employees throughout this crisis makes ethical and business sense. 

Here at Openwage, we’re on a mission to help employers pay their employees in a fairer and more rewarding way that also builds financial resilience. 

Contact us today to find out how on-demand pay can help with the cost-of-living crisis.

How can on-demand pay benefit your employees’ financial wellness?

Today, 4.4 million households in the UK are experiencing serious financial difficulties, and nearly half of all UK adults worry about money every day. Learn more about how on-demand pay benefits your employees’ financial wellness in multiple ways and represents an important employee benefit.

Most people in the UK are now feeling the squeeze of the cost-of-living crisis. This is likely to worsen when we turn on our heating when autumn arrives. 

In the UK, 60% of people say they run out of money before payday. This is a clear indication that employees are struggling with low levels of financial wellness. 

In response to the growing need to support employee financial wellbeing, more employers are deciding to include on-demand pay as part of a holistic wellbeing strategy.

What financial struggles do employees face?

The benefits of on-demand pay can help employees overcome financial struggles, such as:

1. Bill payments don’t fall right after payday – they’re scattered throughout the month.
2. Employees have to foot the bill for business expenses until they’re reimbursed (weeks later).
3. Loans for short-term cash shortfalls are expensive and trap people in debt cycles.
4. Unplanned expenses happen to everyone, even the most financially capable.
5. Many people lack comprehensive financial management skills.

Let’s explore each of these financial struggles and delve into how on-demand pay can help and boost their financial wellness.

Bills are scattered throughout the month 

Bills usually arrive at different dates throughout the month, often long after payday has been and gone. This means that employees have to ensure there are sufficient funds in their accounts at precisely the right time.

Some people plan ahead for bills by transferring money into a separate account to make sure they don’t spend it. However, many people don’t organise their finances in this way for a variety of reasons. 

People can be too busy juggling day-to-day matters to sit down and plan their outgoings. Or they may be too scared to take note of their outgoings because they’re afraid of what they’ll discover.

For those who do budget and set aside money for bills, there are still challenges. With the current energy crisis, we don’t know exactly how much our bills will be each month. This makes this expense in particular increasingly harder to plan. 

Employees can align their income to their expenses using on-demand pay 

With on-demand pay, employees have more flexible access to their earnings and can align it to their expense dates (i.e. the dates they need to pay for bills and other expenses). 

On-demand pay allows employees to access their salary immediately without waiting for the next payday. This means they can simply transfer funds for bills as and when they need them. 

Employees can typically access up to 50% of their gross earned salary and will get paid the remaining portion on their usual payday. So employees won’t be left with nothing come payday. 

Employees wait weeks for business expense reimbursements

Lots of employees are expected to fork out for business expenses during the course of the month. The issue comes when those employees have to wait weeks to be reimbursed by their company payroll, putting an added strain on their finances.

Examples of business expenses include paying for fuel, train tickets, food when on a business trip, tickets for events, work-related subscriptions and more.

These expenses can place employees under insignificant financial stress. Especially when expenses are unplanned (for example, a last-minute business meeting in another town). 

Employees can use on-demand pay instead of savings to cover business expenses

Instead of using their savings to pay for a business expense, employees can transfer the amount they need using on-demand pay. They can pay for the expense without dipping into their savings and having to save money from their last pay cheque. 

This gives employees the peace of mind that they can access funds for a company expenses when they need it, easing financial stress associated with depleting their savings. 

Loans are expensive and can be debt traps

With almost two-thirds of people running out of money before payday, demand for short-term loans and other means to access extra funds is high.

However, once people start taking out expensive loans to see them through, they can become trapped in a cycle of long-term debt. They borrow to pay for something, then find they need to borrow again to pay back the original loan. 

Options to access extra funds include overdrafts, credit cards, and payday loans. However, the options for borrowing money to cover shortfalls are expensive:

• Overdraft interest rates can be around 40%. 
• Interest rates on a typical credit card are around 22.8% APR (APR stands for annual percentage interest rate). 
• Payday loan interest rates can be up to 1,500% APR. 

Another avenue that many people resort to is borrowing from family or friends. Understandably, most people are reluctant to do this. That’s probably because 55% of people don’t want to share their money worries with others.

Employees are not borrowing money when they use on-demand pay

Unlike loans, on-demand pay isn’t a form of borrowing. On-demand pay is a more cost-effective and safer alternative to overdrafts, credit cards, and payday loans because:

• On-demand pay is not a loan so there is no interest to pay.
• There’s no impact on someone’s credit report or credit score when they use on-demand pay (unlike credit cards and payday loans). 
• There is a low-cost, transparent fee of 1% (min. fee of £1 applies) of the amount of on-demand pay transferred.

Unlike confusing APR rates that credit products charge, on-demand pay is transparent about how much users pay. In the app, Openwage users can see what the fee will be to transfer their salary before they transfer it. Plus they can see the total fees for that month (where the user has taken multiple transfers). 

There’s also a cap on how much salary a user can transfer when using Openwage. Typically, this is up to 50% of their gross earned income, but it can be lower. 

Unplanned expenses happen to everyone at some point

No matter how good at budgeting and financial management you are, unexpected things can happen that result in unplanned expenses. For instance, you may need emergency dental work, your car might need repairs, or you might have a parking fine to pay. The list goes on. 

A quarter of all households in the UK don’t have savings to fall back on, and 11.5 million people have less than £100 in savings. Those who do have savings may be reluctant to use them because they worry that if they start down this road, they’ll have nothing left. 

Employees can handle unexpected expenses more easily with on-demand pay

It’s near impossible to eradicate the possibility of unplanned expenses. But on-demand pay means employees can cope with such expenses without dipping into their savings or resorting to high-cost loans.

So if a financial hurdle comes along like an urgent repair to their car, they can pay for their car to be fixed immediately and carry on enjoying life, instead of having to wait until payday.  

The benefit of this is that employees with access to on-demand pay can stick to their savings habit and therefore feel more in control of their money. Having a sense of control over money is an important factor in achieving financial wellness. 

A lack of financial management skills leads to financial stress

Just 52% of people aged 7-17 say they’ve received some form of financial education. This means that a significant proportion of the population is growing up with no idea how to manage their money correctly. 

Low levels of financial capability can translate to:

• Difficulties with budgeting – some people don’t know how to plan their expenses so their money stretches for a whole month.
• A ‘live for today’ mindset – this often applies to younger people earning their own money for the first time. In a report by KPMG, 23% of UK people spend half their salary on payday.
• Dependency on payday loans – borrowers can quickly find themselves trapped in a debt cycle they can’t easily escape.
• Spending money fast – it’s so easy to spend money quickly and with little thought. Online stores target us while we’re online (including social media), causing many of us to spend more than we’d like. 
• Not checking bank balances – only 21% of people check their bank account every month. If someone doesn’t know how much money is in their account, they’re more likely to accidentally go overdrawn or have their card declined while shopping. 

On-demand pay is a useful financial management tool

On-demand pay gives employees greater control over their earnings. They can choose their pay frequency according to their needs. 

For example, if an employee has all their bills coming out of their account in the third week of the month, they can transfer what they need right before the bills are due. That means they don’t have to worry about making their monthly pay cheque stretch for four whole weeks.  

In addition, on-demand pay can help prevent the ‘payday millionaire’ mindset. Since people have access to up to 50% of their salary when they need it, they’re less likely to go on a once-a-month spending spree. 

Discuss the benefits of on-demand pay with us

Increasing numbers of companies are bringing flexibility to the way they pay their employees by offering on-demand pay. But it’s not just employees that benefit. 

On-demand pay is completely free for employers and can even reduce business costs associated with financially stressed employees. 

Openwage is quick and easy to set up and we’ll guide you through every step. Request a demo or get in touch with us to discuss how on-demand pay could become your newest employee benefit.

The information in this article is for general information only. It does not constitute professional advice from Openwage. Openwage is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information in this document relates to your unique circumstances.

Free things to do: How to have fun on zero funds

With the soaring cost of living, many households are feeling the pinch right now. Having fun is important for your mental health, but it can seem difficult to find free things to do when money is tight. That’s why we’ve put together a list of 10 free things to do so you can take care of your mental health and save money at the same time.

Making financial wellbeing a priority 

With 83% of people in the UK affected by the cost-of-living crisis, focusing on financial wellness is more important than ever. 

Unfortunately, many have turned to personal loans, and credit card borrowing has risen at the fastest rate for 17 years. This puts people at risk of spiralling debt, so finding ways to save money has become more of a priority for many.

In addition, as the month of August approaches, many households are either saving for a summer holiday or tightening their belt after taking one. In either case, finding free things to do can help save money and boost financial wellbeing.

Happiness and financial health are linked

The old saying money doesn’t buy happiness is true, but feeling like you have some control over your finances is important for your mental health. Research by Aviva suggests that happiness increases with a sense of financial control, not with how much we earn.

Those with sensible financial plans and budgets in place have a stronger sense of financial wellbeing, regardless of their salary.

Top 10 free things to do

Finding free things to do is not only possible, it’s fun. It means thinking outside the box and rediscovering things that are often right outside our back door or perhaps hark back to your childhood.

So let’s dive into our list of 10 fun things to do when you don’t want to spend:

1. Picnic in the park

Ok, so the UK weather is not always helpful, but on those dry sunny days take advantage of the green open spaces in your area.

London is made up of 40% green open spaces as well as 3,000 public parks. Outside the capital, green spaces are even more accessible, making them a really accessible place to spend some time.

A picnic, and a friendly game of football can provide a fun, free family activity and day out. Being in the fresh air and close to nature can do wonders for your mental health, too.

2. Hiking trips

Again, this free activity is weather dependent, but a little bit of rain shouldn’t put you off. The UK has some incredible hiking destinations with views and historical sights you might not have considered.

If you’re in or around London, check out this list of 10 of the best hikes near London and these 10 ridiculously scenic walks near London by Timeout.

Outside of London, check out Timeout 11 of the best breathtaking UK hikes that amateurs and pros alike can enjoy. So, get your hiking boots on, pack some snacks, and prepare to be inspired by some truly incredible sites. And it’s all absolutely free.

3. Museum days

In 2001, museums and galleries scrapped entrance fees as part of a government plan to widen access to the nation’s culture and heritage.

With over 30 free museums in London alone, this is one free day out you don’t want to overlook. Plus, London’s Natural History museum has just welcomed back Dippy the Dinosaur. If you have kids, you’ll know what a big deal that is!

There are also many free museums across the UK. Check out this list of the best free museums in London and the UK.

4. Have a movie night

While the cost of your Netflix subscription may have recently increased, there are plenty of other streaming services that offer excellent affordable and even free content.

Going out to the cinema is pricey, especially when you factor in treats and the £2 bottle of water!

So, stay in, tune in, and put the popcorn in the microwave.

5. Increase your sense of wellbeing by serving others

Local charities are always looking for volunteers to help. Yes you’ll be giving up your time, but the rewards in terms of wellbeing and a sense of accomplishment cannot be overestimated.

Plus, volunteering can be fun! Do it with a group of friends or choose an area that specifically interests you. From animal welfare, to reading with kids in primary schools, to helping to promote fundraising events, there’s something for everyone.

Volunteering is also a great way to meet new people and learn new skills. By volunteering, you’re not only having a fun day out for free, you’re also giving back to your community.

Check out these useful links to find volunteering opportunities.

6. Your home is your castle

Now’s the time to get going on those DIY projects and it doesn’t have to involve spending money. Simply rearranging furniture or having a declutter can be fun and rewarding.

We recently investigated the benefits of an ancient art that can boost financial wellbeing. Check out our article Feng Shui office tips for wealth.

Consider applying these concepts to your work and living spaces, then watch how they positively affect your sense of wellbeing. You’ll be surprised how beneficial re-thinking how you arrange your furniture can be.

Alternatively, if you’re handy with tools, then why not make something from scratch? Building furniture or seeing what you can create from old pieces is incredibly satisfying.

Some people repaint or repair used furniture. Many get so good at it that they can sell it on for a profit.

7. Upskill your life

In response to the recruitment crisis, many employers are upskilling and retraining employees. Upskilling increases employee resilience as they can tackle new challenges.

You can boost your own resilience by having fun and learning new skills yourself. There are plenty of free courses on learning platforms, such as Udemy and YouTube, of course. 

So whether you want to learn a new skill or build upon existing skills, almost everything is available for free. It doesn’t have to be professional development either. How about learning a new language?

9. Expensive gym memberships aren’t fun

Tips on free things to do wouldn’t be complete if we left out exercise. It’s good for your physical and mental health and best of all, it can be totally free.

So, ditch the gym and take advantage of the free options instead. Got a bike that’s gathering dust? Dig it out and save on petrol costs while you improve your fitness at the same time.

If cycling isn’t your thing, then consider running. Make it fun and do it with friends or challenge yourself with a free running app that measures your distance or steps. 

Finally, why not take advantage of the many open air swimming places around the UK? Sometimes called wild swimming, you can swim for free in rivers, lakes, and some reservoirs.

If you prefer indoor swimming, then check in at your local leisure centre. It’s not completely free, but you can sometimes get a good deal at council-run leisure centres and some lidos.

9. Flower power

Surround yourself with flowers, literally. Have a day out at one of London’s flower markets and see where top florists go to stock up.

Columbia Road flower market and New Covent Garden market in London are two examples of fun free things to do. These markets have also become havens for independent boutiques, stalls, pubs and cafes.

It’s totally worth it, for a free day out wandering around these islands of horticultural beauty.

10. Hit the markets

Free things to do have to include markets. From antiques to food, to jewellery and much more, you can spend a free, fun day out at one of these.

London has markets at Camden, Brewer Street, and Spitalfields, to name a few. Outside of London, nearly every town has some form of market where you can browse second-hand goods, eat local produce, watch street entertainment, or simply soak up the atmosphere.

Take control of your financial life

Budgeting doesn’t have to be a chore. Focus on the things you can do to save money that are fun and reap the benefits of feeling more in control of your financial health.

In a consumer-driven society, we’ve been trained to look at how much we have and what we can get for it. Challenging that concept leads us to see how many things we have at our fingertips that are free.

Start by creating a budget that allows you to save money. Cut down on non-essentials with the help of these tips on free things to do.

Look into options that boost your financial flexibility. For example, ask your employer about earned wage access. This can help relieve the anxiety of unexpected bills and help you feel more in control of your finances.

Finally, if you’re concerned about finances, or are in debt, then make sure you take advantage of free financial advice available.

Key takeaways

• Feeling in control of your financial health is important for our overall wellbeing.
• Keeping to a budget doesn’t mean you can’t have fun.
• There are plenty of fun things to do for free – you just need to think creatively sometimes!
• Take advantage of free financial advice and free, unbiased services that help you feel more in control of your financial life.

Wellbeing benefits for recruitment and retention: 8 tips

It’s a job seekers’ market and candidates can afford to be picky. But forward-thinking recruiters are using wellbeing benefits to keep ahead of the competition. Here, we outline eight tips you can implement to leverage wellbeing benefits for recruitment and retention purposes.

What are wellbeing benefits?

Before we look at how to use wellbeing benefits for recruitment and retention, you may be asking yourself, “What are wellbeing benefits?”.

Wellbeing benefits for recruitment and retention should focus on three areas: physical wellbeing, mental wellbeing, and financial wellbeing.

Why should companies provide physical wellbeing benefits?

Healthcare is still the most-valued employee benefit. But to attract top talent, think beyond the regular gym membership and standard healthcare plan.

It’s also worthwhile considering the growing trend for personalised benefits. It’s no longer one size fits all. To really stand out from your competitors, opt for a healthcare provider that offers personalised individual plans.

Why should companies provide mental wellbeing benefits?

In 2020/2021, stress accounted for 50% of all work-related ill-health according to the Health and Safety Executive’s report on work-related stress, depression and anxiety. Another very-real risk is employee burnout – and this condition is on the rise.

Offering employer-led solutions that target stress reduction can create more harmonious workplaces. As a result, such organisations can experience reduced absenteeism and improved productivity. This is because reducing stress at work can decrease the risk of employee burnout.

Wellbeing benefits could include meditation apps, and in-house wellbeing events, seminars or webinars for your remote teams. In addition, don’t forget to encourage and reward self-care and taking regular breaks from work.

Why should companies provide financial wellbeing benefits?

The current cost-of-living crisis, rise in inflation, and stagnating wages means that taking care of financial health is crucial for employees. 94% of employees are worried about money and 77% of employees say their money worries affect their work.

For this reason, financial wellness is now a must-have benefit. Top companies are now broadening their benefits packages to include financial wellbeing benefits such as on-demand pay.

But holistic workplace wellbeing isn’t entirely down to HR teams – everyone across the business has a part to play.

Drive business growth by joining the wellbeing revolution

A workplace is only as resilient as its workers. Wellbeing benefits are an essential part of building that resilience. Below we list five ways wellbeing benefits can benefit your business:

1. Improve productivity and performance

Wellbeing benefits create happier, healthier employees, which leads to increased productivity and performance. It’s no accident that the companies with the best wellness programs perform better than those without them.

2. Reduce absenteeism

Absenteeism costs employers in the UK an average of £554 per employee (per year). Organisations like Thames Water have seen a reduction in illness-related absence by a massive 76% as a result of its commitment to wellbeing.

3. Lower staff turnover and increase retention rates

Employees are more likely to stay at a company that genuinely cares for their wellbeing. With burnout rates at an all-time high, wellbeing at work is a key factor in retention rates. Data published by PWC shows that wellness programs result in an 18% reduction in staff turnover.

4. Reduce presenteeism

When employees show up sick, they don’t work to their usual standard. This costs UK businesses £15.1 million a year in underperformance, accidents and mistakes.

5. Create a positive company culture and employer brand

Having a holistic strategy, which includes wellbeing benefits, is the hallmark of any forward-thinking company. Quality talent cares about working with ethical companies who put the health and happiness of their stakeholders first.

Feature holistic wellness in your strategy to recruit and retain top talent 

Using wellbeing benefits for recruitment and retention is essential in a tight market. But to reap the best rewards, employers must know how to plan, communicate, and deliver those benefits to employees.

Here are eight actionable ways to promote your wellbeing benefits with the specific aim of helping you recruit and retain employees.

1. Set specific goals for your strategy to leverage benefits for recruitment and retention

Do you have defined goals for your wellbeing strategy? Maybe you want to increase engagement to aid retention, or attract 15% more applications for your advertised jobs? Or do you want to instil a more robust culture of employee wellbeing?

Knowing your goals helps you tailor your wellbeing benefits package and how to best communicate it to meet those goals. For example, if reducing absenteeism is one of your main goals, then your promotion strategy will focus on current employees.

In order to reach goals, you need data. Employee feedback is essential. See the next tip below.

2. Get feedback from employees about your wellbeing benefits

Make sure your wellbeing strategy is delivering tangible results by encouraging feedback from employees. By encouraging feedback, employees can see that their employer cares about their wellbeing. This helps reinforce the importance of workplace wellbeing.  

Don’t forget to examine the data too. For example, have retention rates shifted at all? Are you receiving higher-quality candidates for job openings? Monitor your data regularly to see if you’re going in the right direction.

3. Include your best benefits in all your job adverts

Sounds obvious, but it’s easy to forget to update written information. How often have you copied and pasted the previous job advert and just updated the section about the role and responsibilities?

By not updating your website or job adverts with your up-to-date benefits package, you’re missing out on some serious browny points. That’s because when it comes to accepting a job offer, 78% of employees say that benefits are a very or extremely important part of the decision.

Don’t be afraid to shout about your wellbeing benefits package. It really can have a positive impact on recruitment efforts.

4. Look past the onboarding process

It’s easy to fall into the trap of front-loading benefits communications on new starters. But it makes a lot more sense to have a strategic approach to benefits communications.

Adopting a regular, drip-feed approach to talking about wellbeing benefits acts as a reminder to employees about all the great benefits they have access to. Use wellbeing benefits for retention by keeping new and existing employees informed and updated about changes.

You could consider spotlighting one particular benefit each month and sharing resources or communications with your teams around it. Internal newsletters and communication are other excellent ways of keeping new and existing talent engaged in wellbeing benefits.

Data published by PWC shows that wellness programs result in an 18% reduction in staff turnover.

5. Know your wellbeing benefits package inside and out

Consider giving training to recruiters and HR so they can talk confidently about your wellbeing benefits package. You can also encourage recruiters to use the benefits themselves so they can talk from experience. 

There’s also an important role for managers here. Encourage them to attend events related to wellbeing benefits. This will help build respect and strengthen team bonds. As a result, your workforce will see the leadership team as supportive, relatable human beings.

This has another benefit. That’s because employees will see that the company also cares about the wellbeing of the leadership team too. When leaders lead by example, they are an inspiration to the whole team.

6. Integrate wellbeing benefits into your brand

Gen Z are the workforce of the future and they gravitate towards brands and employers that hold space for workplace wellbeing. 

• Use your website and social media channels to talk about your wellbeing strategy. Make it visible to all prospective and current employees.
• Highlight individual stories, not perks. Testimonials and stories from employees who have found wellbeing benefits helpful are an excellent way of fostering a culture of wellbeing.
• Build credibility and authenticity for your brand by getting the leadership team involved in employee wellbeing conversations and promoting this to existing staff and potential candidates.

Of course, always make sure employees give permission to share these stories.

7. Make information easily accessible

Making access to benefits easier for employees is a great way to increase uptake. Health insurance, for example, can appear very complicated to employees who haven’t used it before.

Consider having all information about all the benefits you offer in one place. This repository of information makes it much easier to look something up.

There are various tools such as Slack and Notion that you could use to store information and links to employee wellbeing benefits.

There are also multiple benefits platforms, for example Perkbox, that allow employees to see all benefits on offer at a glance. These platforms also allow employers to measure engagement so you can monitor what’s important to your workforce.

8. Get outside help

Managing a holistic and comprehensive wellbeing benefits package designed to help recruitment and retention is no small task. For this reason, it can make sense to collaborate with external partners.

There are plenty of providers who offer wellbeing-focused benefits, whether that be physical, mental, or financial wellbeing.

By partnering with Openwage, you can give your employees immediate access to their earnings. Earned wage access (or on-demand pay) can promote financial wellbeing and it can even save you money.

Interested in offering an exciting new financial wellbeing perk?

Openwage is an employee benefit aimed at promoting financial wellbeing by making access to pay fairer and more rewarding.

On-demand pay from Openwage is free for employers and it’s quick to set up. For employees, on-demand pay is a safe and cost-effective alternative to expensive borrowing using credit cards, overdrafts or payday loans.

Interested? Find out more about Openwage.

Business benefits of earned wage access: An HR manager’s guide

Earned wage access (also referred to as EWA) empowers employees to take control of their finances. This is because it gives them instant access to their earnings when they need it. But there are business benefits too. EWA can lower staff turnover, help you fill vacancies faster, and increase staff productivity. Read on to find out the biggest business benefits of earned wage access.

First of all, what is earned wage access?

Earned wage access or ‘on-demand pay’ is a way for employees to access the money they’ve already earned without having to wait for a set pay date. 

Some of the largest retailers and hospitality businesses in the UK have partnered with earned wage access providers as part of their financial benefits packages. 

Despite its surging popularity, some people have reservations about this new way to pay employees. So let’s pull it apart and take a deep dive into EWA and what it means for both employees and the companies they work for.

The business benefits of earned wage access

If you’re wondering whether earned wage access can benefit your business, read on.

1. Improved financial wellbeing: The number one business benefit of earned wage access

Money is one of the primary causes of stress. Nearly half of all employees worry about being unable to meet costs in an emergency because of the time gap between expenses and payday. 

Consequently, it makes sense that employees who are worried about their finances struggle to focus on work. 80% of workers think feeling stressed about money hinders their performance at work. 

Rigid (usually monthly) pay dates can lead to a ‘payday millionaire’ mindset. This is where people spend a large lump of their salary shortly after payday. To make ends meet, they turn to expensive loans later on in the month. 

Almost 43% of employees spend half of their monthly salary within 24 hours of being paid, according to research by Portafina. This ‘feast’ is inevitably followed by a period of ‘famine’. 

Bills and expenses don’t fall neatly at the beginning or end of the month when it’s payday. In fact, we wrote an entire article about how monthly pay cycles leave employees stressed out. 

By offering your employees earned wage access, you can ease their money worries and help them focus on their work.

EWA puts an end to ‘payday millionaire’ thinking and gives employees the peace of mind that they can access their earnings to pay for something unexpected if they need to. 

2. EWA can help you fill job vacancies faster

For most employers in the UK, the cost of recruitment rose by 75% between January and September 2021. The average price of recruiting a new employee is now £3,000. This is because of the countrywide skills shortage. 

With mounting recruitment costs and few people with the skills that businesses need, it makes sense to up the stakes and make your offering more attractive.

According to research carried out by Ernst and Young, 80% of employees would like some kind of immediate earned wage access. This flexible pay method would help employees cover emergency costs and budget better.

Similarly, the study also found that 60% of people would look more favourably at an employer who offered on-demand pay. So, listing EWA as a benefit when you advertise a position can give your company an edge in a competitive market. 

Because on-demand pay from Openwage is free for employers, it can help you attract the right talent without costing you a penny.

3. EWA can help increase employee retention

Financial wellbeing is climbing up the business agenda. Money worries seriously affect people’s mental health, preventing them from sleeping and making them feel generally unwell.

That’s not all. Stress, anxiety and depression accounted for 55% of days taken off work in 2019/2020.

As a result, more organisations are looking for employee benefits that can support employees with their finances. Companies that offer earned wage access are showing they care about the financial wellbeing of their employees. 

When a company takes practical steps to reduce employees’ financial stress, it can encourage feelings of loyalty and engagement among employees. In turn, this can have a positive impact on employee retention. 

4. EWA can help increases work productivity 

As we’ve discussed above, financially stressed employees find it difficult to concentrate on the task at hand. So removing the causes of the financial stress can help employees feel more content. 

Research carried out by British Telecom and Oxford University found that happier employees are 15% more productive. Productivity drives business growth by reducing operational costs as productive employees do more work in fewer hours. 

One of the biggest business benefits of earned wage access is that you can reward your employees as they work. This helps to build a more motivated, financially empowered, and happier workforce. 

5. EWA offers a new level of flexibility

Since the pandemic, flexible working has become a priority for employees. According to a report by Ernst Young, more than half (54%) of global employees would consider leaving their job if they weren’t given some form of flexibility in where and when they work.

In response, many employers are offering flexible working hours, hybrid working models, and flexible benefits packages. So, it makes sense to offer employees flexibility in how they can access the money they’ve earned, too. 

Immediate earned wage access also offers employers flexibility. You can decide when to offer EWA to your employees. For example, you might offer it as a reward for meeting certain performance targets or set it up for all employees when they’ve completed their probationary period.

6. EWA can help your employees make better business decisions

Employees feel empowered to make decisions about their money instead of rigid pay cycles dictating when they receive their earnings. Not only does this help to reduce employee financial stress, it boosts their sense of wellbeing, too.

Confident employees who aren’t under financial stress can focus on work and are less likely to make costly mistakes. They’re also more likely to contribute valuable ideas to their organisation. 

The ability to think clearly and make the right decisions is critical for business success. According to the first Business Decisiveness Report by Capgemini, the average senior executive makes 20 crucial decisions every year. 

Incredibly, the average value of each of these decisions is £160,267. So poor decisions, or failing to make decisions at all, can cost an organisation hundreds of thousands of pounds a year.

7. EWA can create a more financially resilient workforce

On-demand pay and EWA help employees to build financial resilience. You can read about what financial resilience is and why it’s important. But in short, it’s about the ability to absorb a financial shock. 

A financial shock could be an emergency expense like dentist treatment or another unexpected bill like a parking fine. Similarly, surging energy and fuel prices are destabilising people’s finances. 

On-demand pay helps to create financially resilient employees. This is because it gives employees more control over their finances because they can decide when to get paid.

This can be particularly useful for areas of spending, like fuel. With the rising cost of petrol and diesel, employees must somehow find extra money to pay for travel, knowing they won’t be ‘reimbursed’ until payday. 

Flexible pay can ease people’s financial burdens because they can access the money they’ve earned when they need it. By offering on-demand pay, you can help your workforce (and your business) withstand the financial challenges we all face.

Discover on-demand pay with Openwage

With Openwage, offering your employees financial empowerment comes at no cost to you. There are no earned wage access fees for employers to pay and no recurring costs to meet. On-demand pay is totally free for employers. 

What’s more, Openwage on-demand pay is quick and easy to set up. There’s no impact on your payroll and we’ll walk you through every step of the way to set up your account. 

To find out more about the business benefits of earned wage access for your business, please get in touch today or request a demo.