Employee financial wellbeing – helping instil good money habits

89% of employers agree: financial worries have an impact on employees’ workplace performance. What can be done to solve this?

Many businesses now aim to support employees’ physical and emotional health, but what about financial health? According to the Chartered Institute of Personal Development, one in four of employees are experiencing financial difficulty so serious it is affecting their ability to do their job. One in ten said they have found it hard to concentrate/make decisions at work because of money worries and 19% have lost sleep worrying about money, all which impact productivity.

You can find out more about how to manage a multigenerational workforce and their wellbeing needs by downloading our free employer’s guide today.

Our own research found that financial concerns were one of the top two causes of mental health issues in the workplace. 

The NHS states that feeling low or anxious is a normal response to struggling with debt, and as Mind points out: “Money and mental health are often linked. Poor mental health can make managing money harder and worrying about money can make your mental health worse.”

It’s therefore important that businesses understand what is causing financial stress and implement ways in which they can help their employees improve their financial wellbeing.

Find out how our business health and wellbeing services could support both your business and employees here.

What affects employee financial wellbeing

It’s not surprising that many employees are stressed about money; the average UK household owes £12,887, before taking their mortgage into account.

High rents in major cities like London, Manchester and Birmingham are also preventing people (particularly the young) from putting aside some savings. Figures released by the Local Government Association found that one in seven private renters pay more than half of their wage on rent.

Research by the Financial Conduct Authority found that 4.1 million people in the UK are in serious financial difficulty. Unsecured debt as a percentage of household income reached   which is the highest figure in eight years (figures from the ONS for 3 months to the end of September 2016). Those aged between 25-34 have the most debt, which has been built up by university fees, credit card debit and loans.

It’s worth remembering that it’s not just low earners who are affected. According to the CIPD research, one in five of those who earn between £45,000 and £59,999 cited that anxiety over their finances affects their productivity.

Student loan debt is increasingly becoming a problem for younger employees, since tuition fees were raised from £3,225 to £9,000 a year in 2012. The average student graduates with over £50,000 in debt, according to Which?, which they will have to pay back (with interest) for the next 30 years. This adds another financial pressure on younger members of your team who earn over the £25,725 threshold.

People are seeing their wages stretched further and further. Additional pressure is also applied whilst wages continue to remain stagnant. 

How you can support employee financial wellbeing

As an employer, what you can do to support your employees depends on several factors, like the size of the organisation, needs of the workforce, and resources available.

Some ways in which you could support your employees, include:

1. Pay them on time

It goes without saying that this will help employees manage their finances. While most businesses always pay on time as a matter of principal, it should be a priority for every business.

Being paid late could lead to employees resorting to risky payday loans, which can exacerbate money worries.

2. Training and education

Budgeting, managing debts and generally getting to grips with finances are skills which some people are yet to develop. You can encourage your staff to better understand their finances by providing them with training opportunities. From an online ‘finance wellness’ course to a financial management workshop, there are plenty of training options you can use to support your workforce. 

2. Support

Provide your employees access to an Employee Assistance Programme specialising in finances. They will be able to help recommend relevant resources on everything from debt management to financial assistance.

Offering a 24/7 helpline can benefit employees in several ways. It gives your employees access to a qualified professional whenever they need it. This means they benefit from have confidential and open conversations at any time, without having to take time off work and wait around for appointments. It also helps show employees that your company truly cares about their wellbeing, and that they’re valued.

A full EAP comes as standard with Benenden Healthcare for Business. This gives employees round-the-clock access to qualified professionals for a range of issues, including financial health.

4. Season ticket loans

For employees who use public transport to travel to work, it is often cheaper to pay for an annual ticket up front, rather than monthly or weekly ones. Many employees however can’t afford the up-front cost therefore you could offer them a season ticket loan. Your company would pay for the cost of the ticket, and then take the repayments of the loan directly from their net salary.

5. Employee discount programmes

Provide a discount programme which enables employees to save money on everyday purchases. This can include in-store and online vouchers, discounted rates at retail and leisure facilities, cycle to work schemes, and employee cashback schemes. such as dental, optical, physiotherapy and prescriptions.

6. Offer flexible working

Commuting is expensive and time-consuming. Free up your employee’s time and money by offering working from home for a day or two each week. Alternatively, you could allow flexible working hours, to enable people to travel outside of peak hours where the cost of travel is reduced.

7. Pensions

While auto-enrolment is helping to encourage employees to plan for their future, it’s estimated that between 8 – 10% of employees are choosing to opt out. You could help your workforce understand the importance of planning for their financial future by running a Q&A session with them (and allowing answers to be submitted anonymously beforehand to avoid any embarrassment).

It may be that the package you offer your employees is meeting the needs of some but not others. Research by Neyber showed that financial worries can differ by age, for example, 45% of those aged between 18-24 said their income can fluctuate by more than 10% each month. This dropped to 21% for those between 55-64.

It’s therefore worth speaking with your employees to understand what financial support and benefits would resonate well with them, before planning or reviewing your businesses wellbeing package.

Got a question and want to know more? Call us FREE on 0800 414 8179 today or download our health and wellbeing services brochure