As people’s pockets continue to tighten under rising costs, the need for employers to support their employees’ financial wellbeing is becoming more and more important. Technology could play a vital role in helping them deliver and measure an effective financial wellbeing programme.
Many people have seen their weekly food shopping, monthly energy bills, and long-term mortgage or rent payments go up lately. With inflation remaining high, people are likely to feel worried that their money won’t cover their costs.
In fact, even before the cost of living crisis fully took hold, people were feeling the pressure. Our Retirement Voice 2022 research revealed that almost half (49%) were cutting back on their everyday spending, and 58% were worried about running out of money. Not only that, just 41% of the UK population said they felt positive about their finances.
Since then, the economic situation has become more challenging. This could stretch people’s finances to their limits and risks putting their financial wellbeing into a vulnerable position.
What’s the impact of poor financial wellbeing?
Poor financial wellbeing can have a ripple effect on employees’ lives – and on businesses. Those worried about money are more likely to experience increased stress, disturbed sleep, and trouble concentrating, which could lead to poor mental health in the long term.
As a result, this can have a detrimental effect on employers. Productivity and performance levels could drop, and absenteeism could rise as a result of low financial resilience. In fact, research by the CIPD shows that 28% of employees say money worries have affected their work performance. Meanwhile, an average of 4.9 worker days are lost each year due to financial distress.
On the flip side, good financial wellbeing can help employers build a more resilient business by reducing employee stress, preventing absenteeism, and boosting performance and productivity. It could also give them a competitive edge over businesses that offer no financial wellbeing support, helping them retain and attract top talent.
It's clear that supporting employees with their financial wellbeing should take top spot on employers’ agenda. Fortunately, our insights show that many employers agree. In our latest employer survey, 9 in 10 told us that financial wellbeing is important to them.
But how do you deliver a successful financial wellbeing programme? And how do you measure if it’s having a positive impact on your employees? This is where technology can help.
How can technology help employers deliver a financial wellbeing strategy?
For starters, there’s no one-size-fits-all financial wellbeing programme. Employees need different support depending on their age, gender, life stage, and financial goals. The impact of financial worry differs too; for instance, someone approaching retirement will have different concerns to someone who’s saving for their first home.
So how can employers build a programme of support that strengthens the financial resilience of every employee?
Technology like open finance and artificial intelligence (AI) can open the door to opportunities such as integration, data sharing, and hyper personalisation. These can help employers create a financial wellbeing programme that’s based on real user interactions, allowing them to tailor it to each employee.
Money Mindset, available to Standard Life workplace pension scheme members, is a good example of open finance technology in action. It allows employees to connect their bank accounts, pensions, mortgages, credit cards, and more into one place and see their finances in real time. This gives them greater visibility of their money, helping them get to know their finances and better plan for the future.
Money Mindset also takes advantage of AI to do the heavy lifting of delivering personalised communications. Using data from spending activity, the tool automatically sends tailored tips that help employees manage their money, helping them feel more in control and, by extension, contributing to their overall financial wellbeing.
How can technology help employers measure performance?
Of course, it’s essential for employers to understand if their financial wellbeing programme is working.
Big data and user insights can give employers the key to understanding if their support is making a positive difference, allowing them to track engagement levels and spot any trends. It also helps employers make data-driven decisions on how to evolve their strategy over time as employee needs change.
If you have a Standard Life workplace pension scheme, you can access Client Analytics, a member insights tool that uses data and segmentation to track trends in real time. It allows you to see which groups are engaging with their pension, and which are lagging behind. And based on these insights, you can target specific groups with personalised financial wellbeing support and communications – helping you improve relevancy and engagement.
Financial wellbeing technology is just getting started
We’re already seeing how technology is making waves in the financial wellbeing space – and this is only the beginning. As the tech advances, employers can feel increasingly confident that they have access to the right tools to deliver a financial wellbeing programme that’s measurable, and based on real life, real time member needs.