How has the global pandemic shifted businesses‘ approach to financial wellbeing? What more can employers be doing to support employees? We explore this in a recent podcast where we discussed a whitepaper the team at Wagestream have produced, which you can download here. Some of the key takeaways are summarised below.
Financial wellbeing’s impact on us all
Everyone, to a certain extent, carries some level of financial stress and depending on an individual’s circumstances it can impact both working and private life. With the well documented blurring of lines created by the global pandemic between work and personal lives, there has been an increase in recognition that mental health is not an issue that organisations can – or want to – ignore for their people.
What is also well documented is the link between mental health and an individual’s finances. It is because of this the team at Wagestream conducted a report of 5,000 UK employees and 60 HR leaders to produce a ‘state of the nation’ overview. This allowed them to see how many organisations are assessing the financial wellbeing of their people, as well as how maintaining good financial wellbeing amongst employees can have a material impact on productivity for a business.
Do employers know how employees feel about their finances?
Based on the responses to the report itself, it appears that many UK employers need to review their perceptions of how big an impact financial wellbeing has on their employees. The Wagetream report highlights that 2% of employers surveyed believing that their employees worry about money daily.
24% of employees worry about money in the UK daily.
In fact, when you have 93% of UK employers surveyed believing that they have a financial wellbeing strategy in place, do the numbers suggest that there is an unresolved problem for UK businesses?
Perhaps it is a terminology issue. The challenge highlighted by the report is that financial wellbeing has differing interpretations across businesses. To some employers it is simply ensuring better pay for employees, meaning more money in pockets. For others it is related to other benefits like pension schemes and the ability to access money through newer technologies such as real time payment apps. As a result, there’s a gap between expectation and reality where many employers think that they have a robust financial wellbeing strategy but it isn’t meeting the true needs of the workforce. In order to address this disparity, a channel of communication needs to be opened between employers and employees in an area that historically hasn’t commonly been discussed in the workplace.
Organisations need to understand the financial pain points of their employees to inform their people strategy; but it may not be as simple as it seems. The challenge sits around the stigma in Britain when it comes to talking about money; few are comfortable talking about their salary or financial situation. And as we know, some demographics are more likely to feel able to ask for (and receive) more money than others so there are complex social and ethnographic considerations around this concept.
This ongoing stigma is curious given that pay is widely accepted to be seen as one of (if not the most) important benefits a company gives its people. But how flexible is the ability to access this benefit, given that for most people their access to their pay is usually based on a cycle that runs on a monthly, or in some instances, weekly basis? And what percentage of employees want (or need) more immediate access to the money they are earning?
This sparks the question; should employers be looking at creative ways in which they can give people more access to their money and if so, would this help them with their financial wellbeing?
What more can employers do?
Of course, there are applications and software which can give employees access to their money through earned wage access schemes and more. However, as is often the case, whilst technology is an enabler it is not the panacea an organisation might be looking for. Often we see examples of organisations that might purchase this kind of technology with the right intentions to support the business, but unless the right training, support and guidance is given to a business, the result is an expensively acquired tool that will never solve the problem.
Communication is of paramount importance and for many businesses simply talking about issues such as financial wellbeing is where some organisations are sadly lacking. Understanding where financial concerns are being distributed around an organisation, talking to employees, ensuring that a business is viewed by its people as a safe place to share issues surrounding financial wellbeing is the best place to start. Recognising that you will have line managers as well as employees who may have their own pressures surrounding financial wellbeing is important too.
Most employers do have a financial programme, but there are so many instances within organisations of varying sizes where nobody in the business knows it exists, including line managers. As such, communicating any financial wellbeing programmes – and seeing it as an ongoing exercise to reinforce to the business – is vital. Supporting and training the management throughout a business, so that they can have the confidence to talk about any financial wellbeing support, should also be at the forefront of a business’s minds before looking at any technology.
Is it the employer’s responsibility?
Should employers have the responsibility to help their employees take a portion of their pay and put it into a savings fund to build up a buffer? Isn’t there an element of self-help that should be required from an individual, rather than relying on their employer? What does a business benefit from taking on the responsibility to ensure the financial wellbeing of its people?
The Wagestream report reviews this and observes from its data that organisations that have staff with a bigger savings buffer are more productive. So rather than thinking of it as taking on the responsibility that an individual should take on itself, if viewed through the lens of improving productivity within the business, there’s a true benefit to all. Wellbeing is complex, but the pandemic has shone a light on the importance of organisations taking it seriously from both a moral and business perspective.
This post was written by LACE Partners. They are an exhibitor on the HRTech247 Consulting & Advisory Partners floor in the Partners Hall here.