Employers are recognising the link between a healthy workforce and staff productivity. They’re also prioritising the mental health of their employees for the same reasons – it makes good business sense. But beyond health and mental wellness, the financial wellness of employees also has business consequences.
According to a recent study, financial stress costs the UK economy £121 billion and 18 million working hours in lost productivity each year. The Money and Mental Health Institute has also shown that money worries have an enormous effect on mental wellbeing and can be both the cause and effect of mental health problems.
While money problems may seem personal, it’s in your business’s best interest to help alleviate your staff’s financial worries.
Here are five ways to help your employees be more financially secure.
1. Offer financially focused benefits
Beyond salary, there are several employee benefits that impact the financial situation of employees, and employers have an important role in providing employees access to these.
Group Income Protection (GIP), for example, can pay a portion of an employee’s salary, after they have been off work for a defined period of time, should they become ill or injured and unable to work. This cover is crucial for helping to maintain the livelihood of an employee and their family at a time when they likely need it most.
The cover also gives employees access to a range of other beneficial services, like early intervention or preventative support to keep people at work. Should an absence occur, the cover provides the employee with access to a team of rehabilitation specialists committed to helping the employee return to work in the safest, most productive way so they can continue to earn a living.
Beyond GIP, critical illness cover can provide employees with a lump sum of money should they suffer a qualifying medical condition or procedure. And that lump sum can be used to pay the mortgage, travel expenses or out-of-pocket costs related to treatment or recovery.
2. Balance short-term savings perks with long-term benefits
Pairing perks like childcare vouchers or subsidised memberships are an easy way to reward your workforce with quick savings wins. But it is important to balance these perks with long-term financial benefits, like life insurance or workplace savings schemes, which can further boost the financial security of your employees.
Almost one-third of workers have no savings or investments.
Offering a broad range of financial products is important, too, because variety ensures you’re more likely to appeal to employees’ varying lifestyles and needs.
In fact, a study from Thomsons has shown UK businesses offering education and a broader range of financial products have seen a 22% increase in employee engagement and over twice the effectiveness of their benefits programme than those that don’t.
3. Make saving easy for employees
Research by the Social Market Foundation and Neyber shows that 48% of workers are not putting money aside for anything beyond regular bills. They’ve also discovered that almost one-third of workers have no savings or investments – seriously impacting their financial futures.
Providing employees with access to a workplace savings plan, like a corporate ISA, or offering more than the minimum pension contribution, can encourage healthy savings behaviours – ultimately helping employees build their financial safety nets.
FinTech tools can also help employees learn about saving while implementing quick actions that promote good behavior, like closing savings gaps and making smarter spending decisions. They’re also easy to promote internally with flyers, workshops or contests.
Some tools consolidate savings, credit cards, loans and investment accounts, pulling in live transaction data. You can set money goals and track spending and progress towards meeting these. There are also savings tools that offer a simple way for employees to start investing through the workplace.
4. Educate employees on what’s available
Financially focused benefits aren’t very effective if your employees don’t know about them.
Research in Unum’s Workplace Communications Blueprint shows that employees prefer a range of different methods to receive communications about their benefits – and one size does not fit all. Tailoring your benefits communication delivery to your employees can ensure your message is better received.
While talking about employees’ financial health may seem personal, creating an open dialogue can ensure workers feel comfortable with seeking help when needed.
Beyond communicating to your employees about benefits, it’s important to engage them.
Interactive tools like savings or loan pay-off calculators can help employees better gauge the future depending on different actions. Placing these calculators in handy places like your corporate intranet or break room can allow employees to access them on their own time.
Financial education can give staff at all salary levels the tools and resources needed to better manage their finances.
5. Create an open dialogue
While talking about employees’ financial health may seem personal, creating an open dialogue can ensure workers feel comfortable with seeking help when needed.
Offer advice on the actions employees can take to help resolve these difficult financial situations. This could include financial benefits education, debt counselling, advice on debt consolidation and open discussion in workshops – all part of a holistic financial wellbeing strategy.
Providing staff the opportunity to follow up on a more personal basis in a one-to-one meeting, or even to watch a webcast in private, is another way to normalise the subject and keep the discussion going. To maintain privacy, consider running general financial education workshops and seminars, then point employees to sources for more information.
Businesses can also introduce Employee Assistance Programmes (EAPs) for those who may need more advanced support. EAPs offer direct, confidential contact with experts who can support individuals with areas causing emotional distress, including money troubles, and are often available through Group Income Protection plans.
Financial wellness should become a key business incentive, as the results are equally beneficial for employers and employees. With a proper financial wellbeing strategy in place, businesses can expect reduced financial worries, better employee engagement and productivity levels, as well as fewer stress-related absences.
