Six ways to support your employees' financial wellbeing at work

Perhaps unsurprisingly in this context, a recent survey revealed that the most popular perk employees would like to receive is overtime, replacing early finish Fridays on the top spot. With one in eight UK workers living in poverty, the theme of financial wellbeing and how organisations plan to respond and support their workforce will need to be an ongoing focus for HR teams in 2023.

We take a closer look at the impact of poor financial wellbeing in the workplace and explore six ways that organisations can better support the financial wellness of their employees.

What is employee financial wellbeing?

Financial wellbeing relates to the relationship people have with their money and how it impacts their life. If someone is secure in their financial future and feels comfortable with their lifestyle and monetary situation, it is likely that they will have positive financial wellbeing.

It’s clear that many UK employers understand the importance of positive employee financial wellbeing in the workplace, with nearly 7 in 10 acknowledging that staff performance is negatively affected when employees are under financial pressure. However, whilst in-work poverty is clearly becoming a growing problem for workers, support for financial wellbeing at work is still a much-neglected area.

Over a third (36%) of respondents in the CIPD Reward Management survey reported that senior leadership do see the need for a financial wellbeing strategy but often lack the time, money or expertise to implement. It appears that whilst most organisations are taking steps to support the mental health of their workforce more generally, the tools and resources to support employees’ financial wellbeing still appears to be lacking.

In a recent survey of over 200 HR managers which we conducted in collaboration with HR Grapevine, it was found that over half of the respondents are supporting the financial wellbeing of their employees through financial advice. Depending on the organisation, it may be in the form of seminars, online education, access to hotlines or a financial wellbeing app, but whatever the resources available, it is clear that changes are being made regarding the accessibility of financial support.

The impact of financial wellbeing in the workplace 

Poor financial wellbeing can have a big impact on a person’s health and way of life. Financial worries will likely influence productivity at work, causing distraction and worry that will take away from their primary focus. A recent study has reported that two-thirds of employees who are struggling financially describe at least one sign of poor mental health that could affect their ability to function at work. Recent CIPD research also highlights this, showing that perhaps unsurprisingly stress, tiredness and inability to concentrate due to money worries was likely to affect work performance.

Whilst our survey revealed that nearly 90% of HR Managers understand they have a responsibility to support their employees with the rising living costs, a quarter of respondents aren't actually providing substantial support.

This will undoubtedly have a ripple effect, because if employees don’t feel like they can speak up when they’re struggling, they’re more likely to hide it from their employer and less likely to take necessary time off. It’s possible that in these instances stress will become worse and the cycle will continue without managers even being aware.

Keeping employees engaged and productive during times of financial uncertainty is a challenge, but demonstrating a people-centric focus with genuine values and connection is a good place to start. Investing time and resources into tangible help alongside emotional support will help them navigate financial wellbeing.

Six ways organisations can support employee financial wellbeing

1. Pay reviews

This seems simple but regular salary reviews will not only ensure you’re supporting the financial wellbeing of employees, but also keep your organisation competitive to new talent. Whilst pay increases may not seem possible for some organisations, things like overtime pay and bonus schemes can contribute towards long term talent attraction and retention, ensuring you don’t lose valuable employees to competitors willing and able to pay more. The long term impact of stagnant pay will only serve to drive dissatisfaction and contribute towards a decline in productivity.  

2. Financial planning

Our survey found that over half of organisations are now directing employees to professional financial support.

A good pension scheme is the basic way organisations currently do this, but that’s only part of the picture and doesn’t help with short term financial requirements. With more and more of us struggling to save for houses, pay rent or manage unexpected expenses, providing resources that support employees with their day-to-day money management will be increasingly needed.

You may wish to partner with an external expert, which is what Access has done with HSBC to benefit our employees with a number of helpful tools. Their financial fitness hub is a great resource, with articles concerning everyday budgeting and growing your money. Employees can also book a telephone discussion with HSBCS go through a quick and easy Financial Health Check.

3. Financial wellness benefits

This will vary depending on size and budget of your organisation, but choosing the right benefits partner will be important to provide the right support and resources for your employees. Benefits for smaller organisations could include money management apps, workshops or webinars to help employees with more immediate financial challenges like managing debt.

A great example of a flexible employee benefits platform is Salary Extras by provider Caboodle, which was recently acquired by Access People. Access People MD, Charles Butterworth said: “The need to reward and recognise employees to aid retention of valued employees is now more important than ever before. Employee needs are shifting, especially with the rising cost of living – so providing money saving benefits that are accessible at any time is essential.”

Caboodle have also produced some helpful resources on the topic of financial wellbeing at work, including How to help employees manage their finances and How financial wellbeing affects mental health.

4. Financial wellbeing eLearning

Part of your eLearning suite for employees could include workplace wellbeing, featuring a financial wellbeing module specifically to help employees take ownership over ways to look after their finances and signpost them to internal and external support that is available to them. Our financial services eLearning courses can also assist employees with this tricky topic, giving them the tools they need to help them manage money effectively.

5. Utilise technology

Typically, employees facing an unexpected cost partway through the month, would have to reach for high-cost credit which may have a long-term impact on their finances. However, technology such as on-demand pay apps can provide employees instant access to pay they’ve already earned, giving them more flexibility to deal with unexpected expenses. Providing this kind of safety net removes some of the stress which contributes to poor financial wellbeing, at no cost to the employer.

From an employer perspective, those offering on-demand pay via our on-demand pay app Access EarlyPay have also seen a 22% increase in staff productivity and up to 25% decrease in staff turnover, showing that technology can have a clear impact on financial wellbeing to the benefit of both the employee and employer. Despite these positive outcomes, our survey found that over 80% are not offering their employees this kind of flexible financial benefit.

Using technology by automating tasks where possible will help at an employee level, particularly if a large and varied workload is being juggled. Streamlining the workflow will naturally reduce stress and ease pressure. Our HR software PeopleXD has the capabilities to offer this, meaning that employees can spend less time on administrative tasks and instead allow them to focus on more strategic priorities, reducing the burden of a stressful and excessive workload.

6. Create a culture of financial security

There are a range of steps to be taken by employers to ensure that their workforce has a healthy approach to their finances through economic difficulty and beyond. These steps both reinforce and are reinforced by each other – for example, accurate, outsourced payroll is bolstered by financial education through internal communication tools. Living and working through an economic downturn can be difficult, but when businesses act to protect their employees, the benefits are widespread for staff and organisations alike. While it may not be possible for changes to happen overnight, our survey revealed that there are now more discussions being had surrounding the topic of financial support, with nearly half of the respondents engaging with their employees regarding this.

As mentioned previously, organisations should be supporting the financial wellbeing of employees as part of their wider workplace wellbeing offering. In fact, a study by the Institute for Social and Economic Research at the University of Essex found that initiatives which improve financial wellbeing have a more positive effect on employee health than offering an extra £1,000 a month.

A strong financial wellbeing strategy should be part of a wider holistic approach to workplace wellbeing, with combined goals and metrics and simpler to measure ROI. Aside from seeing increases in productivity and decreased staff turnover and absences, in the context of the talent and skills crisis many organisations are likely to achieved improved attraction and retention rates too.

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