Understanding your employees' financial wellbeing issues

Financial wellbeing, or any employee benefits offering in general, can be approached from two different angles - either from the point of view of the employer, or as seen and experienced by the employee.

HR and wellbeing practitioners would do well to alternate between wearing these different hats when considering employee benefits. After all, most of us are employees first and foremost. 

In an ideal world, these two points of view are aligned, and an employer would understand completely how employees see and experience their organisation’s benefits offering. However, since such an understanding requires employers to go to some trouble to get to the bottom of what it is their people want, we often find an unfortunate misalignment between real need and the solutions on offer. 

Consider the following short-cut as a fresh approach to understanding the issues that matter: 

Forget about the idea of boxing benefits, or dividing benefits into different categories. 

The most natural thing to do, and partly because the provider market is structured in this way, is to categorise benefits as fitting into separate boxes for physical, mental, and financial wellbeing respectively. In addition, organisations tend to have a playbook or a strategy, that requires these boxes to be ticked, often in the absence of understanding the true needs of the workforce. 

Changing your perspective

For example, say your organisation is deemed to be short on mental health benefits, you might consider looking at mental health first aiders or rolling out a mindfulness app. Similarly, if we don’t offer enough physical wellbeing benefits, you could look at discounted gym memberships and so on. For financial wellbeing, we’re broadly looking at education, low-cost loans, and alternative saving vehicles. 

Instead, change the hat you wear and consider that for a large chunk of employees (maybe even the majority), there might be no difference between financial wellbeing and the other aspects of wellbeing. For these employees, wellbeing IS financial wellbeing. 

In our experience, this is the case in general, but the statement is especially true in current times. There are two major factors contributing to this: 

1. our working environment has been irrevocably changed, to some extent for the worse, by the Covid pandemic; and 
2. ordinary people are struggling to survive in a world hit by a financial storm that some experts say might be worse than the 2008 banking crisis. 

Our recent market research on employee resilience shows that one out of three people in the UK have been significantly impacted by the cost-of-living crisis and that more than 40% of us have no excess funds we can access in the case of a financial emergency. 

For those struggling with their finances, putting food on the table, and stretching their earnings so that it lasts to the end of the month, everything else is tied up in this. Everything else is impacted by financial concerns. We don't sleep, we don't exercise, we don't feel like socialising. In many instances we cannot afford to socialise, at least not how we used to. Even in a non-monetary sense, the fallout from Covid has changed attitudes towards socialising and many people have become accustomed to increased isolation, only exacerbated by our increased virtual existence through social media and other digital platforms. 

In many instances we cannot travel to work like we used to. Many people who would love to be in the company of their colleagues more regularly find themselves working at home more than they ought to because it has become too costly to commute. As a result, our wellbeing starts to suffer, and all because of the initial financial battle we’re waging. 

Cause and effect

The point is that overall wellbeing is intricately linked to financial wellbeing. If our financial wellbeing suffers, the rest of our wellbeing will suffer. This is not necessarily true the other way around.

So, the answer to the question of what financial wellbeing issues matter to employees is that all of it matters. And it doesn’t just matter in the context of financial wellbeing, but in all aspects of wellbeing.

However, we would caution against jumping into offering specific financial wellbeing products such as loans or additional savings vehicles that would often be presented without the necessary advice you would expect to accompany an individual’s decision to take up such products. Without understanding the different aspects that make up someone’s unique financial circumstances, we would rather suggest a general approach that starts with solid financial education and leveraging what is already offered through, for example, your pension provider. 

In summary, understand that your wider wellbeing proposition is likely to only be as strong as the support you give your employees around financial wellbeing. In addition, remember to view your proposition through the eyes of a struggling employee – it is less about compartmentalising benefits and more about focusing on the one that will have a positive impact on all the others.

It's also important to remember that looking after the welfare of staff isn’t something that managers can do in a vacuum. Individuals also have a duty of care to themselves. They need to be able to manage their personal resilience. Visit our Risk Portal to view a plethora of content that can help you manage employee mental health and wellbeing.