Major life events and economic pressures can have a significant impact on employees’ finances. With the right tools, employers can help boost their employees’ financial resilience and support them during periods of change.
Financial resilience can wax and wane over an employee’s lifetime. Major life changes and events – like buying a house, caring responsibilities, and retirement – can put a strain on their financial situation. And combined with the rising cost of living, employees may find it even harder to ride out financial turbulence.
Insights from our Retirement Voice 2022 research showed that many were already feeling financially squeezed, with almost half (49%) cutting back on their spending. In addition, 58% said they were worried about running out of money – despite taking measures to cut back.
Employers have a duty of care to their employees, and it’s important to support them if their financial resilience has been knocked by a change in circumstances. This could help improve employees’ overall financial wellbeing too, which could lead to business benefits such as increased performance and productivity, and reduced absenteeism.
As an employer, you can play a key role in helping strengthen your employees’ financial resilience and support them through periods of change and instability. Here are a few tips to get started:
Tips to improve financial resilience
1. Understand employee needs
There’s no one-size-fits-all approach to supporting people with their financial resilience; every employee and their experience is different.
For instance, employees’ financial priorities or goals are likely to vary depending on their life stage and financial situation. Some may be focussing on saving for their first home, whilst others may be approaching retirement and getting their pension pots in order. For others, their priority may be to pay off credit cards or loans and get their finances into better shape.
Therefore, it’s important to get a solid understanding of what matters most to your workforce, so that you can personalise your support offering. You could start by normalising conversations about money in the workplace. This could give employees a safe space to share their financial concerns and goals, and give you an insight into what they need.
Homebuyers, for example, may be worried about saving enough for a deposit or feel confused by the complex homebuying process. You can support them by signposting to resources and information that help them feel better prepared for buying their first home.
For Standard Life workplace pension scheme members, they can access Homebuyer Hub to help them navigate this journey. The app provides employees with tailored guidance, coaching, and tools to help them at every step, from saving for a deposit to understanding stamp duty.
2. Provide easy-to-digest financial content
Findings from our Retirement Voice research reveal that only 51% feel confident in their understanding of financial products. Furthermore, half the population (50%) feel overwhelmed by the amount of information. Clearly, the information out there isn’t doing its job to fill the gap in people’s financial knowledge.
You can help bridge the gap by providing bitesize financial content that’s easy to understand and can help boost employees’ financial confidence. Standard Life workplace pension scheme members can get access to snackable content through Money Mindset, which includes tools, tips, and videos that cover a range of financial topics. Getting a better understanding of finances doesn’t need to be overwhelming – and Money Mindset allows employees to increase their knowledge whenever they have a few minutes to spare.
Furthermore, you could signpost employees to external, independent resources such as The Money and Pensions Service and MoneyHelper. These are designed to provide impartial guidance for a range of financial circumstances, from everyday budgeting to help tackling debt.
3. Highlight the importance of planning
Planning can make a big difference to how people feel about their financial situation. According to our Retirement Voice 2022 report, people that plan are almost three times more positive about their finances than non-planners. In addition, 74% of planners say they’re confident making financial decisions; just 42% of non-planners say the same.
For employees who may be struggling to make ends meet or who are facing a significant life change, planning takes on even greater importance. Financial upheaval – for whatever reason – can be incredibly distressing, so it can be helpful for employees to have an emergency fund or plan in place to help strengthen their financial resilience.
You can support employees by highlighting the importance of planning and providing resources to help. A good place to start is to create an internal communications campaign that emphasises the benefits of being prepared and having a safety net for unexpected circumstances. Include useful information such as how to set up a budget, tips on saving for an emergency fund, and where to turn to for support.
Members of a Standard Life workplace pension scheme can also get access to digital tools that could help them feel more in control of their finances. These include a spending insights tool, which allows employees to see where their money is going, as well as a budget planner, which can help them save in line with their goals.