What is financial well-being?

Financial well-being concerns your employee’s financial health and security.

Of course, an employee’s personal finances are very much that – personal. But an employee dealing with financial stress could seriously impact upon your business.

In fact, here in the UK, 70% of employers believe that financial pressure negatively impacts staff performance. This is backed up by 1 in 5 employees admitting to a drop in productivity due to financial issues. Money worries and fears of what the future holds is at the forefront of most people’s minds, and we don’t see this changing anytime soon.

Ensuring employees have the support and guidance they require when it comes to money management is key to promoting financial well-being.

The impact of the cost of living crisis

Financial stress can be caused by anything from a parent being unable to buy school uniform to someone battling addiction to someone suffering from financial abuse. These issues have become significantly more pertinent in recent years – with the pandemic being followed by the cost-of-living crisis.

Increases in the prices of necessities has led to high inflation around the globe, leading to interest rate spikes, increases in mortgage costs and huge financial pressure for many households.

On top of that, the soaring energy prices, the end of the government financial support and various supply chain issues and goods shortages globally are proving extremely problematic for business owners.

The impact is hitting both employer and employee. As an employer, you may experience employees requesting pay rises to compensate for the financial issues they are facing. However, with businesses facing rising costs, pay rises may well be impractical. The solution is to find different ways to help employees.

How can SMEs help their employees with their financial well-being?

As stated, it’s apparent that if employees are stressed about their finances, it shows in other areas of their life, such as work. Yes, finances are very much a personal matter and may be a little bit of a taboo for most, but promoting good money management and offering support can be constructive for employees.

Education

Educating employees on financial well-being is a crucial first step to helping them. Knowledge is power – the more your employees know on the topic, the more powerful they will be in dealing with it.

Offering training to staff on financial planning, money management and saving can be a huge help. The HR Dept is proud to partner with FinWELL, a financial education and well-being support provider. Through this partnership we can help with employee financial wellness programmes, including content and workshops.

Free Advice Lines

SMEs can utilise cost-effective ways to show their support and, in turn, it will help employees feel less alone in their worries and recognise that there are others in situations similar to their own. Examples of this could be pointing to charities and organisations that offer free, impartial debt advice like Citizens Advice, National Debt Line and Step Change. Another consideration could be introducing an Employee Assistance Programmes to provide staff with a safe and confidential space to receive counselling on various topics, including financial advice. 

Benefits

If your business currently offers employee benefits such as discount vouchers, gym memberships or healthcare plans, now is a good time to remind them of such perks. Maybe some are not aware or haven’t remembered to take advantage of them. If your business doesn’t offer benefits, you could think about suitable ones that would reduce their cost of living. 

Financial Planning

Invest in financial planning for your employees. While this service will cost you, it will improve your employees financial state and therefore their state of well-being, which could contribute to better job performance. Financial planning consists of a specialist meeting with employees to develop a tailored plan for them and their future, giving them peace of mind, the tools to make better decisions, confidence and helps alleviate stress. 

Open Communication

Openness can be vital – sometimes your employees may just need someone to talk to. Fostering a culture of two-way openness within your organisation will mean that employees feel comfortable discussing worries and concerns, leading to a more positive workplace.

What are your responsibilities as an employer?

It’s your responsibility to make sure staff are paid a fair amount and on time. Other things you can consider to alleviate some financial burden for employees would be to review your reward strategy, your benefits policy and financial well-being policy.

Ensuring your employees feel safe, secure and not alone, especially during this crisis, is key.

How can The HR Dept help?

As stated, it’s apparent that if employees are stressed about their finances, it shows in other areas of their life, such as work. Yes, finances are very much a personal matter and may be a little bit of a taboo for most, but promoting good money management and offering support can be constructive for employees.

If you need help at this time to manage the financial well-being of people in your business, reach out today and let us guide you through it.