As the high cost of living continues to put the strain on people’s budgets, financial worry is starting to feel like the norm. But as an employer, you can help support your employees by implementing an effective financial wellbeing strategy.
Financial wellbeing appears to be at a low point, with many feeling worried about how far their finances will stretch as costs continue to rise. Indeed, our Retirement Voice 2022 report, which asked almost 6,000 people from across the UK on their views on pension planning and retirement, found that:
- Just 41% of people feel positive about their financial situation
- Almost half are looking to cut back on everyday spending
- 4 in 10 would consider reducing or stopping their pension contributions
Money worries like these can, unsurprisingly, spill into people’s work life too. This can raise the business risks linked to having a workforce with poor financial wellbeing and resilience, such as lower performance and productivity levels, increased stress and absenteeism, and difficulties retaining staff.
By investing in a financial wellbeing strategy that supports your employees, you can help bolster their financial capability and support them in their aim to achieve the financial goals that matter most to them. Not only that, employees who feel financially well are more likely to be healthier, happier, and able to bring their best selves to work.
Implementing a financial wellbeing strategy can also give you a competitive advantage over businesses that don’t. In fact, a survey by CIPD found that 65% of people think having a financial wellbeing policy will be an important factor when they consider their next employer.
Employers think a financial wellbeing strategy is important – but not all have one
In our annual employer survey, which tracks employer needs and challenges, 9 in 10 employers say that having a financial wellbeing strategy is important to them. Despite this, only half (52%) have a financial wellbeing strategy in place already – highlighting a hefty gap. And given the effect that poor financial wellbeing can have on individuals and businesses, more needs to be done to help close that gap.
With that in mind, if you’re looking to create a financial wellbeing strategy from scratch – or strengthen your existing one – here are a few ideas that could help you get started.
How to build an effective financial wellbeing strategy
Engage with key stakeholders
For your financial wellbeing strategy to make the most impact, it’s important to get buy-in from your key business stakeholders. This means engaging not only with your HR or reward teams, but with your leadership team too. Senior managers set the tone for direction and culture within the workplace, so it’s important to get them on board.
Consider creating a business case to promote the benefits of supporting employees’ financial wellbeing, and outline how it can support the wider strategic direction and values of the business. If you have a broader health and wellbeing strategy, highlight the ways in which adding financial wellbeing support can enhance it. Crucially, include the well-documented risks and costs associated with having a workforce that is financially unwell.
Understand what your employees need
Financial unwellness can affect people differently, so there’s no one-size-fits-all approach to helping those who may be struggling. In addition, there can be a stigma attached to having low financial capability, leaving some people feeling uncomfortable or unwilling to discuss their financial concerns. Research by The Money and Pensions Service reveals that 81% of UK adults avoid talking about money.
Enlisting your senior stakeholders to normalise conversations about money can go a long way to encouraging people to open up. Doing so can also help you understand what matters most to your employees.
Look at your existing benefits
It’s worth taking a look at your existing employee benefits package, because you may find that you offer some financial wellbeing support already. It also gives you the opportunity to plug any gaps.
If you have existing financial wellbeing initiatives in place, are your employees aware of what’s available? Are these easy to access? If not, look at ways to boost awareness and visibility.
A good place to start is to improve signposting through increased communications. Consider creating a regular newsletter to remind employees of the support available if they need help. People can experience financial worry at any time, so by communicating regularly, you can increase the chances of delivering support when they need it most. Our ready-to-go campaigns – which provide employers with a range of ready-made and free-to-use communication templates – can help support you with this.
Provide easy-to-understand financial education
Our Retirement Voice 2022 research revealed that just 51% of people feel comfortable that they understand financial products. Meanwhile, 50% of people feel overwhelmed by the amount of information on pensions, and 41% don’t know what to do with it.
This suggests that the resources out there are lacking in clarity and not providing information in a way that people can understand or resonate with.
Financial education is key to a person’s overall financial wellbeing, and can help them make confident decisions about their money. So providing employees with easy-to-understand financial education materials should form an essential part of your financial wellbeing strategy.
Money Mindset can help you provide the support your employees need. Easily accessible through the Standard Life app, Money Mindset gives employees a library of tools, tips, and videos that are easy to digest and quick to access.
Keep evolving your financial wellbeing strategy
Creating a financial wellbeing strategy isn’t a one-off task, and it’s likely that you’ll need to evolve it over time to meet the changing needs of your employees as they navigate different life stages.
If your employees are part of a Standard Life workplace pension scheme, for instance, they can get free access to Money Mindset, which provides them with a range of tools to support their financial wellbeing at different points in their life. They can connect their financial accounts into one place and see their money in real time, as well as access bitesize financial content that can help them make confident decisions in the short and long term. They’ll also get access to tools that help them set up a budget, find lost pensions, plan for their retirement, and support them with buying their first home.
Ultimately, given the widespread impact of financial worry and the ongoing cost of living crisis, implementing a financial wellbeing strategy is fast becoming a must-have rather than a nice-to-have – so now is the right time to build one.
The information in this article is based on our understanding in May 2023 and should not be regarded as financial advice.
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