The economic conditions of the past few years have posed enormous challenges for both employers and employees.
Astronomic levels of inflation have rendered maintaining profit margins near impossible without pushing rising costs onto customer prices. Meanwhile, this inflation is depressing consumer spending power, with sales suffering as a result.
Despite these challenges, and indeed because of these challenges, it is vital that employers, HR managers, and decision-makers take action to protect the financial wellbeing of their employees.
Businesses must do more
While the ongoing cost-of-living crisis clearly necessitates increased wellbeing support from
employers, the level currently being provided is proving inadequate, particularly from a financial perspective.
According to Mintago’s recent research, two-fifths of Britons are either ‘very stressed’ (9%) or ‘somewhat stressed’ (30%) in the current climate, with the cost-of-living crisis named as the number one stress motivator for 62% of respondents. Concerningly, for lower paid workers (i.e. earning less than £30,000), this figure rises even higher to 69%.
Yet just a fraction (36%) of employees say that their employers actually have initiatives in place that are designed to improve the financial wellbeing of staff. What’s more, only 38% of workers say that they have the tools, guidance, and advice available through their employer to manage their day-to-day finances effectively.
Naturally, this is not true of all businesses – although among those offering support, Mintago’s research also revealed that an alarming 71% employees had received financial wellbeing support that had made no difference in improving their financial situation.
Biggest cost to lower income workers
Most concerningly, there is a large discrepancy in financial wellbeing support between higher and lower income workers; not only are lower paid employees suffering most acutely at the hands of the cost-of-living crisis, but they are also provided with the least support from their employers.
While a majority (55%) of those earning more than £50,001 felt their employer was doing enough to support staff amid the cost-of-living crisis, less than a quarter (24%) of workers earning less than £30,000 shared this sentiment.
Without question, this divergence is having dire consequences on the current mental and financial wellbeing of lower income staff. But ultimately this is not a temporary issue but one that must be tackled for employees’ long-term financial security: even though more than half (58%) of those earning more than £30,001 indicated that they have the tools in place for future financial planning, just a quarter (24%) of those earning less felt this way.
The impact for businesses of a lack of support
Such lack of support affects well beyond an employee’s finances, permeating many other areas of their lives. For example, job performance can take a significant hit from financial anxiety and stress.
Our research showed that half (49%) of Britons’ performance in the workplace is negatively affected by stress and anxiety. With a similar number (51%) saying that their stress and anxiety levels have increased because of the cost-of-living crisis, this ought to be of great concern to businesses.
It is also evident that many lack trust in their employers’ willingness to provide support, as an alarming seven-in-ten (68%) workers feel their employer has no interest about their financial wellbeing. This poses a huge risk to employee satisfaction and therefore staff retention.
Indeed, two-fifths (44%) of worker say they would leave their current roles to work for an employer that provides better financial wellbeing support, while 30% intend to move jobs in the next 12 months.
Providing support that makes a difference
While businesses clearly must step up and improve employee financial wellbeing support, the fact remains that many businesses are also struggling financially. As such, it is understandable that the most obvious solution of implementing pay rises is not currently possible.
What’s more, each employee has their own set of financial responsibilities and therefore unique needs, so a handful of single, blanket policies will not suffice.
Robust, impactful policies must be put in place by employers. One such example is increasing access to financial advice, for example by connecting employees with financial advisors. IFAs (independent financial advisors) can provide independent, unbiased, and customised advice, enabling staff to make solid and informed financial decisions both in the short-term and for the future.
Supplying education materials is another simple yet effective option to enhance employees’ financial literacy. Such support from businesses would aid employees in getting to grips with the various aspects of their financial lives and reduce finance-related stresses.
Similarly, implementing a comprehensive pension dashboard would enable workers to plan for their long-term financial goals, optimising their management of their pension and even tracing lost pension pots from previous employers, giving their finances a healthy boost.
Financial health is key to a healthy workplace
By enhancing the financial wellbeing support on offer to employees, businesses can easily and cost-effectively aid in easing the acute financial burden and stresses that many staff workers are facing in the current economic climate, creating a happier, healthier working environment.