Employers are becoming increasingly aware of the the impact poor financial health can have on both people and businesses – and of the urgent need to address this pervasive issue. But what does an effective financial wellbeing strategy look like?

Paul Bartlett, Independent Reward and Benefits Development Consultant of Hawk Incentives, provides insight on how to approach financial wellbeing in a way that engages employees and best supports them with breaking bad money habits.

Becky Norman, Editor, HRZone: We’ve seen a rapid expansion in the financial wellness market as more employers grasped the extent of the problem and how it impacts on productivity and health. What do you think is driving this expansion? 

Paul Bartlett, Independent Reward and Benefits Development Consultant: The UK economy loses out on £73 billion every year because of absenteeism and its less well-known but more corrosive partner presenteeism. An increasingly widespread problem, presenteeism (not taking time off to recover when you’re ill or otherwise unable to do your job effectively) significantly dents workplace productivity.

A 2018 Simplyhealth survey suggests that occurrences of presenteeism have tripled since 2010 to affect 86% of workplaces. Businesses are starting to realise that there’s a commercial return in addressing the issues underlying the statistics. Helping employees achieve greater financial wellbeing is one example.

Many people experience financial stress because a lack of personal or social resources prevents them from feeling in control of their money. So companies are beginning to offer their staff a range of resources to plug that gap. The result? Happier, more productive employees.

Essentially, helping your employees get their personal finances in order could help your business improve its own commercial performance. And with many companies still finding their feet in the world of workplace wellness, financial wellness represents a tangible starting point on the road to a comprehensive employee wellbeing strategy.

Becky Norman, Editor, HRZone: In the past, many financial wellbeing programmes have focused on managing debt. Why is saving the new focus?

Paul Bartlett, Independent Reward and Benefits Development Consultant: The results of a 2017 YouGov survey added to a body of evidence that suggests a person’s financial wellbeing is not determined by income but by savings instead. This includes having a ‘savings buffer’ – a pot of money set aside for unforeseen outgoings – that you contribute to regularly.

But the survey also uncovered the worrying extent of the UK’s live-for-the-moment approach. The YouGov research found that almost two thirds of the working nation are focused on their current financial situation rather than saving for the future. With 2 in 5 of the working population having less than a month’s savings to tide them over, financial insecurity is weighing heavily on people’s minds.

Starting a savings habit, however small, is the key to reducing the UK workforce’s levels of financial stress.

Becky Norman, Editor, HRZone: There seems to be a lack of engagement with saving – how can employers address this with their people?

Paul Bartlett, Independent Reward and Benefits Development Consultant: Emotion always trumps logic. People need something more than the knowledge that setting money aside for a rainy day is a smart thing to do. The market is swamped with savings products that are technically fine but fail to cut through the noise. Many forget to create an emotional connection while others are let down by a poor user experience.

Monzo and Starling are good examples of challenger banking brands connecting with a younger demographic that can be hard to reach.

These brands include savings products in their gamified offer, but there’s still huge opportunity for businesses to make saving money as fun and as natural as spending it. The Hawk Incentives team works relentlessly to devise fresh ways to make that happen by tapping into social and economic trends.

Not all stress that manifests itself in the workplace can be traced back to financial worries so focus on offering appropriate support.

Take technology, for instance. We know more and more people view certain technology purchases as both essential and emotionally significant. Macbooks, for example, are used and retained for longer than any other laptop brands. So we’ve partnered with Apple to develop an employee plan that saves people money when buying the tech products they love and rely on.

Another approach is to create a savings habit by weaving it into each act of spending. This idea is key to how we’re developing our prepaid card range. Participants can use their card for everyday spending with over 70 major brands and retailers.

In return, they receive rebates that can be accrued in a savings pot. So every time they spend, they save too. This regularity, however small the amount saved each time, is fundamental to creating a habit. 

Becky Norman, Editor, HRZone: What would you say are key elements of a good financial wellbeing strategy?

Paul Bartlett, Independent Reward and Benefits Development Consultant: A successful financial wellbeing strategy makes sure the goals people set themselves are rewarding and achievable. Gamification is one of the best ways to do that.

Don’t let the term put you off. Far from trivialising important objectives like building savings or managing debt, gamified approaches are delivering substantial and consistent results by motivating people in a very real way.

I think about it this way. To engage someone with your brand or product, you need to influence both their thinking and their behaviour. Gamification works by creating a mindset that triggers certain behaviour.

Becky Norman, Editor, HRZone: What advice would you give to HR professionals when it comes to getting buy-in from senior management for a financial wellbeing programme?

Paul Bartlett, Independent Reward and Benefits Development Consultant: Firstly, keep things in perspective. Your wellbeing programme shouldn’t cost you more in time, energy and money than what you get back. Not all stress that manifests itself in the workplace can be traced back to financial worries so focus on offering appropriate support.

If you want to design a financial offering that really works for your people, thinking about the big socio-economic trends is always a good place to start.

Secondly, keep it simple. The emphasis for senior management should be on the benefit of a more productive workforce. But that doesn’t necessarily mean you need to measure the results of the financial wellbeing programme itself to justify its existence. If you’ve succeeded in creating a sustainable and widespread change in behaviour, it will be self-evident.

Becky Norman, Editor, HRZone: What impact would you say having a financial wellbeing strategy in place has on an organisation’s ability to attract and retain staff?

Paul Bartlett, Independent Reward and Benefits Development Consultant: I don’t think a financial wellbeing strategy should be designed as a tool to attract or retain staff, no matter how good that strategy may be.

If financial wellbeing becomes a handcuff, you haven’t solved an engagement problem, you’ve just given it a different shape. If an employee is only staying in their job because it gives them access to cheap finance, for example, no one wins.

Focus on improving your overall business performance by helping your employees unlock their full potential for however long they’re with you. If they decide to stick around for longer because they’re more engaged as a result, that’s a bonus.

Becky Norman, Editor, HRZone: What are the typical challenges you’ve seen organisations come up against when implementing a financial wellbeing strategy?

Paul Bartlett, Independent Reward and Benefits Development Consultant: The biggest challenge is engagement. What might seem a ‘no brainer’ of an offer isn’t always taken up by employees.

If you want to design a financial offering that really works for your people, thinking about the big socio-economic trends is always a good place to start.

I’ve already mentioned that the proportion of workers employed on short-term contracts or as freelancers is growing significantly. The number one thing this population values is flexibility so think about how you can offer that to them. Portable pensions, ISAs, pure cards and our Apple technology scheme would all fit the bill.