In recent years, wellbeing programs and initiatives have accelerated on the agenda of many HR leaders’ minds. There is vast and definitive evidence that links positive employee wellbeing to better productivity, engagement, quality, and retention for businesses. However, on the heels of the COVID-19 pandemic arises another challenge, and employers need to be prepared to carry the burdens of the ensuing financial crisis and its impact on their staff: financial wellbeing.
What is financial wellbeing?
For most people, money is not an easy subject. Over 11.5 million British adults have less than £100 in their savings to fall back on, and 9 in 10 consumers feel undereducated when it comes to personal finance.
There’s a lot of work to be done, and employees are rightly stressing about it. It’s no surprise that a PwC survey found over half of employees citing financial matters and challenges to be the leading cause of their stress, resulting in a significant impact on productivity, engagement, performance, and absenteeism at work. Ultimately, the less confident an employee feels in their ongoing financial obligations or future, the more likely the company they work for will take a hit.
Employers are in a compelling position in 2020 to tackle this issue head-on. By promoting financial wellbeing, businesses can empower their teams to retake control over their finances and have mutual peace of mind and security over what’s to come in the future.
However, the challenge for HR professionals is navigating the range of solutions to build a strategy that is clear, cohesive and inclusive of all employees’ needs. More so, they need to prove measurable outcomes that are both effective and sustainable in the long term.
Why point-solutions don’t work
The difficulty in implementing new solutions for employees is that most organizations take a reactive approach. Seeing a problem and fixing it isn’t necessarily a bad thing, but it does mean that companies tend to invest in countless point-solutions that negate the nuances of each employee.
For example, having distinct providers that specialize in pensions, mortgages, loan management, or budgeting among others, can become a convoluted and often pricey method to address a wide range of financial challenges. There is no one-size-fits-all financial path – some members of your team might be struggling with student debt, others looking to build a family and own a home, while a handful are preparing for retirement.
The singular nature of point-solutions inevitably means that employees can fall through the cracks and be bandaging only one step of a larger journey.
For a financial wellbeing solution to be completely employee-centric and effective, it needs to be as holistic and flexible as your team’s range of dreams. That means having an interface where they can see a real-time view of all their accounts (including pensions and investments), as well as access to an archive of financial education content and advice that grows with them and their evolving priorities in life.
When you approach financial wellbeing through an all-encompassing lens, feeling in control of one’s finances isn’t just possible, it becomes more accessible and enjoyable, and you’re almost guaranteed higher uptake and opting in of the benefits.
Financial wellbeing will only work if it is unbiased
Each employee faces multiple influences when it comes to finances – the government, the financial services industry, their friends and families, and of course, the internet. The question is, are people getting the right information? Will banks sell them more products? Does searching online give people the right guidance?
Education needs to be taught in a safe environment, and we know from studies that employers are one of the most trusted sources of information for people in general. Furthermore, when asked directly how people would like their employers to help with their financial wellbeing, the majority of respondents said they wanted their employers to point them in the direction of expert and independent guidance, and offer tools for better management of their money.
Because employees are looking for their employers to offer tools rather than direct financial assistance – organizations can use their platform to deploy a third party solution that will feel and be less intrusive and more unbiased, but also assuring staff that the solution is credible and equipped with a solid framework.
The road to resilient employees
Although employers are starting to recognize the importance of financial wellbeing, there remains a large disconnect between what to do about it, how to get it done, and whether employees are truly feeling like their needs are being met.
Ultimately, HR professionals need to come up with a strategy that covers all their bases and guarantees longevity. In order to truly ‘futureproof’ an organization and the sum of those that make it a success, there needs to be a championing of tools and education that is focused on prevention and education. Like life, financial wellbeing is a journey and your employees need to be mentally and financially prepared for what life throws at them.
Don’t know where to start? We’re offering organizations a free financial health assessment to understand the financial health of your employees and how best to meet their needs.
Learn more about Mintago and how we are changing the world of financial wellbeing.