Financial wellbeing support is integral to employers being able to meet their high-level HR objectives, according to research*. Nearly all (94%) respondents to the research hope to use their financial wellbeing strategy as a tool to meet their HR objective of improving employee wellbeing, while 81% hope to use their strategy to help retain employees and the same proportion hope to boost their employee engagement levels.
Over half (53%) of employers hope to use their financial wellbeing strategies to attract new talent to their organisations, while 46% are focusing on attracting a more diverse workforce.
Almost half (46%) of organisations hope to improve their employee performance and productivity, which is a key benefit of financial wellbeing support. It’s well known that employees who are supported to understand their financial situation and how to manage their money are less likely to suffer financial stress and absenteeism, resulting in higher levels of workplace attendance, engagement and productivity.
Employee demand is driving employers to bolster their efforts in more than four in 10 (44%) organisations.
Accordingly, the report found that employers across the board are considering providing access to and funding for financial wellbeing support for their workforce. More than a third (34%) of employers plan to fund a workplace financial education programme within the next two years, which is in addition to the 39% of organisations that already do so; 26% plan to introduce financial coaching, which is more than double the 12% of organisations already doing so; and 23% have plans to fund guidance on budgeting and general money management, with 43% currently already doing so.
Further, 22% of organisations plan to fund guidance on financial emergencies, with 24% currently already doing so.
Organisations are also funding a range of employee benefits to help employees’ money to stretch further. This includes employer pension contributions above auto-enrolment minimum (88%), salary sacrifice plans (85%) and product discounts and voluntary benefits (84%). The report also found that 32% offer savings via tax-free wrappers such as ISAs, with 19% planning to do this within the next two years.
However, a more joined up approach is needed if employers have any hope of achieving their current HR goals given that 23% say that they have lots of financial wellbeing benefits but they are not joined up in strategy, and just 5% have a mature financial wellbeing strategy that is integrated into their company culture.
This can perhaps be explained by the fact that just 12% of board members take a strong lead on financial wellbeing within their organisation, with less than half (45%) of HR professionals themselves taking the lead. Almost one-fifth (19%) of organisations have no financial wellbeing strategy leader at all.
Jonathan Watts-Lay, Director, WEALTH at work comments; “It’s time that financial wellbeing became a keystone of workplace wellbeing. This means looking beyond offering isolated and disjointed products that serve short-term needs as the solution, and instead creating a cohesive strategy that aligns with HR and corporate strategy.”
He adds; “A three-pronged approach by employers is required. Firstly, they must secure buy-in for their financial wellbeing strategy at the top of their organisation. Support from board members and leadership, as well as from line managers, employee networks and other stakeholders, ensures financial wellbeing is taken seriously.
Secondly, organisations should review their current offering and explore if they are joined up in strategy. They should look at the take up of existing benefits, as well as what employees ’ current and future financial wellbeing needs are. Anonymised and confidential focus groups and surveys can help with this.
Thirdly, employers must then help their employees to understand the financial benefits and services on offer, how and when they may want to use them, and how they join up with other benefits on offer. Financial education and guidance is key to this.
Watts-Lay comments; “Many leading employers are now integrating holistic and proactive financial wellbeing programmes that include financial education, guidance and regulated financial advice, to help employees build their financial resilience for now and the future.”
*Research from REBA in association with WEALTH at work.