How to create a financial well-being strategy
Financial worries are a significant cause of workplace stress.
So what should you be doing to help employees manage their money?
The summer holidays are now a distant memory. The
children are back at school and with new uniforms.
And now here’s the next big expenditure looming
- the Christmas season. According to a 2015 report by
American Express, the average increased spend over the
festivities, including food, tops £1,490. It’s likely to have
risen since then. For some that won’t be a problem, but for
many employees this will be yet another cause for worry
and stress.
According to our recent survey carried out with the CIPD,
Health and Well-being at Work, a quarter of respondents
reported that poor financial well-being was a major cause
of workplace stress among their employees. More than a
third also disagreed that their employees had the necessary
knowledge and skills to make the best reward and
benefit choices to meet their financial needs. Despite this,
only one in ten organisations has a financial well-being
strategy.
Yet such strategies have clear benefits. Not only do they
reduce the stress and worry caused by financial uncertainty,
but according to a survey by Barclays they can boost
recruitment, with 38 per cent of people saying they’d be
more likely to work for companies which offer financial
well-being. The same research also suggests that having
such a strategy in place can boost work place productivity
by four per cent.
So how can you create an effective financial well-being
strategy? Where do you start? What should it include?
The following list provides a range of suggestions for what
a financial well-being strategy should encompass.
1. Build for the future
Pensions are a significant part of any reward package. Instead
of just investing the Government’s recommended
amounts, consider offering to match any increased contribution
an employee makes. For example, if an employee
adds an extra two per cent, add an extra four. Not only
does this encourage greater engagement with saving for
the future, but it improves pension outcomes. One less
thing to worry about, and a clear demonstration of your
organisation’s commitment to financial well-being.
2. Money management
Clearly if employees understand finance better they’ll be
able to make better choices about how they manage their
money and their benefits. Consider the development of
an online portal where employees can seek information
on pensions, loans and savings, and even advice on tax. If
budgets or expertise mean you can’t do this yourself, find
a third party to help you set it up. This should show just
where they can go to seek further advice, including access
to trained financial advisors if necessary. How about holding
a Financial Well-ness Week with a range of seminars
and advice sessions?
3. Workplace loans
Repaying loans can be costly. So why not offer employees
loans through the company? As well as providing better
rates than those available on the High Street or online, this
helps employees to take control of their finances in a managed
way. Once the loan is paid off, why not convert it into
a saving scheme?
4. Special discounts
Consider offering exclusive discounts for employees. By
working with an external provider, you can create a scheme
which provides just that from retailers based both locally
and nationally. The local angle also gives an added boost to
the community. You could also extend this to an employee’s
family and friends.
5. Set up a well-being fund
As part of the benefits package, how about offering access
to a specific ‘well-being fund’. This can then be used on various
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well-being initiatives, such as gym membership, dance
classes, or swimming lessons for the family. Or perhaps the
money could be put towards other beneficial activities,
like learning a new skill, such art classes or even driving
lessons. This again helps to reduce stress, and allows employees
to get out and do things either just on their own or
share them with the family.
6. Health benefits
Worries about being able to cope with sickness and ill
health can be a major cause of stress. Health plans and
dental plans take away much of the financial worry, not
least as opticians, dentists and physiotherapy treatments
can all add costs to already potentially over stretched
budgets.
For many employers in the finance and healthcare sectors
this should almost be second nature. It’s your business
after all. But whatever your work involves, the steps you
need to take to improve your employees’ financial well-being
needn’t be expensive. Simple ideas can bring significant
long-term benefits. Not only will one major cause of workplace
stress be reduced, but you’ll see other clear benefits
in terms of productivity, retention and recruitment,
making a significant return on every penny spent. Finally,
your employees can look forward to the festive season
knowing that finance is just one less thing they have to
worry about.
For more ideas on improving financial wellbeing, we’ve put
together a guide to designing a financial wellbeing strategy
that enables people to take practical steps to getting
in control of their finances.
Pam Whelan
Director of Corporate, Simplyhealth
Pam Whelan
Director of Corporate
Simplyhealth
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