What are some of the ways that employers can tackle financial wellbeing at work? With 58% of employees reporting that they feel financially stressed, now is the time to make positive steps to promote financial wellbeing among employees.
If you’re looking to increase employee retention, increase productivity, and reduce absenteeism, then focusing on your employee’s financial wellbeing could be the answer.
Reportedly 1.5 million people are experiencing debt problems that are leading to mental health concerns. It’s not surprising that this is having an impact at work.
Research shows that almost half of all employees have concerns over their personal finances and this spills over into the workplace. There is a direct correlation between mental wellness and financial wellness and this needs to be recognised in the workplace.
A huge barrier has been broken down in terms of discussing mental health. Now, the same needs to happen with financial health.
Unbelievably, financial stress costs UK businesses around £15.2 billion a year. This is down to loss in productivity, absenteeism, and replacing employees who leave.
At Openwage, we want to help you to change those statistics. We want to help you to become a company at the forefront when it comes to your employees’ financial wellness. So, let’s have a look at some of the actions your business can take.
1. Open the lines of communication
To begin addressing issues around financial wellbeing, the first step is to get your employees talking. This is a challenge, because many of us shy away from talking about what is often a sensitive topic.
Remove the shame associated with money problems
With this in mind, it’s down to companies to instigate a cultural change.
A move away from feelings of shame and towards ones of positivity and support, knowing that help is at hand. Of course, such a change needs to be led from the top, but the business case for such a change shouldn’t make this difficult.
The bottom line has to take priority. But let’s not forget the impact of your people on your bottom line.
Looking after your employees’ wellness promotes loyalty to your company, meaning higher retention rates. It can also boost your brand image, making it easier to attract new talent.
Knowing this makes embracing a cultural change nothing but a common-sense approach.
Encourage informal chats
So, how do you get your employees talking?
The first step is to talk to them! Encourage conversations around financial wellness. Create posters, newsletters, and share articles focused on financial wellbeing.
Make it clear that this is an area that you as a business are concerned about. Let your employees know how they can talk about their finances.
Why not consider sessions around financial education where questions can be asked? Could there be a less formal approach with a coffee and a chat?
Ultimately, the approach that you decide to take should be appropriate for your employees and their needs.
What matters is that you demonstrate to your employees that they can talk about their financial wellbeing openly and without fear of being judged.
2. Invest in financial education
A study by the CIPD shows that one in five employees would appreciate impartial financial guidance from their employer.
Providing financial education is a great way to tackle financial wellbeing at work. It shows that an organisation cares, but it also encourages learning and the fostering of responsibility.
While as an employer you can’t manage your employees’ finances, you can equip them with the knowledge and tools to do this for themselves.
Assess your employees’ financial needs
A diverse workforce means that there is likely to be a great variance when it comes to your employees’ understanding of financial wellness. Even when there is some crossover, employees will still have different needs.
The needs of Generation Z will not be the same as Millennials or older generations. For example, younger employees may be more interested in long-term investments or paying off student loans.
Compare this with older employees who are approaching retirement and are focused on financial security.
Providing financial education
So how do you provide financial education to your workforce? There’s many ways you can do this, but you may have to be creative if some or all of your team work at home. Here’s a few ideas:
Call in an expert
You could partner with an impartial financial expert who can have one-to-one consultations with your employees. They could hold talks or even host a Q+A session where employees can submit questions in advance to avoid any feelings of embarrassment.
Provide online training
This could contain resources that can be read in an employees own time. Links to calculators, spreadsheets, and useful guides that help people manage their money better would be a great start.
Signpost to other organisations
Don’t forget to remind employees about where they can get help and support.
There are a multitude of organisations including Money Advice Service that can offer support around money and debt. There are numerous free services available so don’t let your employees fall into the trap of paying for support or advice.
When it comes to tackling your employees’ financial wellbeing at work, one obvious starting point is often employee benefits.
It’s common for companies to offer employee discounts as a perk. This helps employees save money and makes them feel valued and potentially more loyal to your company.
Beyond discounts, other employee benefits worthy of consideration include:
- Childcare vouchers
- Subsidised memberships
- Annual leave buy-back schemes
- Life insurance policies
- Workplace savings scheme
- Pay advances
This is a starting point to explore exactly what your employees would benefit from. As we have seen, different generations will have different needs.
A healthy balance of employee benefits allows a company to cater for a broad range of people at different stages of their life.
One employee benefit that is gaining popularity around the world is flexibility in pay schedules also know as pay advances. Essentially, this means empowering employees to decide when they receive some of their pay.
Flexible pay, also called on-demand pay, pay advances, and salary advances help reduce stress associated with having to wait for payday. For example, when an expected bill arrives.
Flexible pay cycles
The importance of employee financial wellbeing is on the rise. Employers are beginning to recognise this too.
Businesses that understand the concept of financial wellness also understand the direct impact that it has on their organisations. Those that embrace financial education do so in pursuit of increased productivity, increased employee retention, and a reduction in absence.
A key step towards this is by addressing the issue created by monthly pay cycles. Yes, it works for your business in terms of reducing the administrative burden of the alternatives, but monthly pay cycles don’t work for your employees. Openwage offers a win-win solution that benefits everyone.
What is Openwage?
Openwage allows your employees to access their pay as they earn it. Employees can request their earned pay at any point in the month, for example to cover an unexpected expense or bill.
This helps employees smooth the gap between income and expenses, and leads to less financial stress because they don’t have to make all of their pay last the whole month.
No payroll impact
Importantly, Openwage integrates with your existing payroll. Employees receive their pay advance directly from Openwage, so there’s no cashflow impact for your business.
No more high-cost credit
Pay on demand is not a loan. Openwage is a smarter alternative to payday loans, credit cards and overdrafts. This is because employees don’t pay any interest when they transfer on-demand pay.
4. Encourage financial resilience
Another great way to tackle financial wellbeing at work is to focus on financial resilience.
Financial reliance stems from having a long-term strategy in place to deal with financial requirements including emergencies.
There are many aspects to financial resilience. Here are the key areas and some tips on how you can empower your employees to become more financially resilient.
Good grounding in financial education
Financial education can help teach your employees the importance of remaining resilient in terms of their finances. Financial resilience refers to the ability to deal with, or recover from, a financial emergency or set-back.
This might be an unexpected bill or having to replace an expensive (but essential) household appliance.
Do you know how many of your employees could effectively manage a financial emergency halfway through the month? For many, monthly pay cycles can create financial stress as employees have to wait a long time until the next payday.
So when a financial challenge arises, they may turn to credit cards or payday loans. These create on-going financial issues and often lead to stress which can impact their performance at work.
Learning how to effectively budget is essential.
Budgeting is all about creating the right habits when it comes to money. Having, and sticking to a budget means that an employee can build up an emergency fund.
A sensible emergency fund is to have enough in the bank to cover all your expenses for three months. This would enable an employee to cope in the event of losing their job or having to give up work for any reason.
The ability to save infinitely boosts financial resilience.
With savings in the bank, it’s far less stressful for employees to deal with an unexpected bill for example the car or boiler breaking down.
As an employer, you can encourage your employees to save by educating them on why it’s important and how they can do it easily.
Embrace the journey
Here are just some of the ways to tackle financial wellbeing at work.
It’s important to remember that employees that are financially resilient have higher levels of financial wellness. This enables them to focus on their work without the stress and distractions caused by money worries.
So when an unexpected expense arises, they don’t have to rely on borrowing from others, whether that’s friends, family, the bank, or another lender. Instead, they can use the savings they’ve worked hard to generate or access their pay on-demand through Openwage.
Importantly, financial resilience steers employees away from borrowing from lenders at scandalously-high interest rates.
You can take the first step towards building employee financial resilience by getting in touch. We’d love to talk to you about how Openwage can help your business reach its potential.