Supporting employee financial wellbeing

As the cost-of-living crisis continues, individuals throughout the UK find themselves struggling to afford essential day-to-day basics, having already cut back on any small luxuries they were once able to afford. And it’s not just the lowest paid workers who are affected by this, as those on higher salaries too have felt the pinch and have had to make changes to their lifestyle to meet the demands of the current economy.

Background

Supporting employee wellbeing should be a focal point of all businesses and not just where it has been impacted by work. It’s not only the right thing to do, but if you think about it pragmatically, an employee facing challenges in their life is likely to see it impact on their ability to achieve their role to the fullest. And no business wants to see a decrease in productivity, especially in a time of increased costs.

Employees may require support for a wide variety of reasons, some more obvious than others. Whilst the law may influence how employees are supported with some of these areas, for others, it is down to the individual business.

There’s an argument that the wellbeing of employees has never been more important than it is now. Over the past few years, the aftermath of the pandemic, a cost-of-living crisis and major societal and political events, such as the war in Ukraine, have left many people feeling drained mentally, physically and financially.

Financial Wellbeing

From April this year, financial pressures will increase. Household bills will rise with the change to the energy price cap and as businesses put up prices to account for their own increased costs in relation to National Minimum Wage and National Insurance contributions.

Adding to this, employers’ redundancy intentions are at their highest levels in 10 years, outside of the pandemic, with many being concerned about their financial wellbeing as a result.

Clearly, it isn’t just employees feeling the pressure. Those increases in business costs, amongst other challenges, mean businesses are fighting extra hard to protect their bottom line. So, that begs the question, how do you support your employees without breaking the bank yourself?

Is a pay rise the only solution?

It could be easy to jump straight to the conclusion that paying an employee more is the way to support their financial wellbeing, however, in reality, this may not be possible. After all, if increasing employee salaries leads to extra pressure on the business to cut costs in other areas, or increase the expectations of its employees, this could result in a more stressful work environment for employees and potentially even create the need to reconsider headcount within the organisation. However with that being said, it could be a good idea to ensure any pay review schemes are transparent and clearly communicated. This way, employees will know exactly what they need to do, if anything, to increase their income.

There are many other low-cost ways that employers can use to support employees’ financial wellbeing. This could start by placing a focus on providing information, guidance and coaching on how to manage and maximise their finances. This may be done internally or with the support of an external organisation. Workshops or sessions on budgeting and saving could be held or signposting to debt support services. There is even the option of holding “swap shops” and encouraging the re-using of items such as clothes or furniture with their colleagues.

Where the organisation’s budget for supporting employees doesn’t quite stretch to pay rises, then it may still be possible to consider incentives such as free or discounted food, discounted train tickets or car parking. Anything that may alleviate some of the financial burden for employees can create a positive impact.

Whilst whatever is offered in the way of support will be individual to the business, all businesses should consider outlining the support available in a financial wellbeing policy. This will give employees the reassurance and confidence they need in order to access this support if required. By having it communicated in a policy, it may eliminate the need for a potentially uncomfortable conversation for the employee seeking support.

Sensitivity is crucial

Whatever is introduced, it should be remembered that an individual’s financial circumstances can be a personal and sensitive topic. Creating a safe environment where employees feel they can come and talk about their situation, without fear of judgement, will be key to being able to signpost the best support. However, not all employees will be comfortable talking about or sharing their own situation. Taking advantage of an Employee Assistance Program could provide these individuals with personal, confidential and tailored support for their own needs at no cost to them.

Ultimately, supporting employee financial wellbeing is just one strand of support that can be offered. Any financial wellbeing policies or support mechanisms should be in conjunction with wider packages that aim to provide employees with an environment that supports their physical and mental wellbeing. It’s important to remember that a one size fits all approach is unlikely to work and where an employee raises any concerns regarding their wellbeing, it should be dealt with sensitively on a case-by-case basis.

Contact Ashored for help and support with your business.