Financial Wellbeing: Supporting Employees Through Economic Challenges

The Growing Impact of Financial Stress

Financial wellbeing concerns continue to be at the forefront for employees across the UK. What began as a cost of living crisis in 2022 has evolved, with additional pressures from increasing mortgage interest rates and persistent inflation in 2023.

The impact on your workforce is significant:

• According to the Centre for Economic and Business Research (CEBR), one in ten employees have missed days at work due to financial problems

• Over a third of employees are distracted at work by debt concerns

• Research from the British Association for Counselling and Psychotherapy shows 44% of employees are anxious about how they're going to pay their bills

• 16% say they are losing sleep over money worries

• 22% are cutting back on activities such as going to the gym, attending yoga classes, or meeting friends

All these shifts in behavior have the potential to damage someone's physical, emotional, and mental health, while simultaneously affecting workplace performance and productivity.

Why Supporting Financial Wellbeing Matters

As an employer, you may wonder if there's anything you can do to help your workforce, especially if you're not in a position to offer pay increases. The answer is yes.

Supporting employee financial wellbeing is important because:

1. Performance impact: Employees worried about finances struggle to focus on tasks, negatively affecting their work quality

2. Health consequences: Ongoing financial concerns affect overall health and wellbeing

3. Limited resources: Your workforce may have no other support available for financial guidance

4. Stigma reduction: Open conversations about financial challenges prevent isolation and stigma

5. Business benefits: As demonstrated by companies like SUEZ, financial wellbeing programs can reduce absence rates and save businesses significant amounts (£640,000 in SUEZ's case since 2019)

Financial Wellbeing Starts with Listening

Before implementing solutions, start by understanding your employees' specific needs:

• Review employee survey results and EAP data

• Ask managers to watch for changes in team behavior

• Consider holding focus groups

• Consult with staff representatives and committees

Listening provides the insights needed to select the right support for your specific workforce.

Effective and Affordable Solutions

1. Discount Programs

For an annual fee of just £5 per employee, services like Terryberry's 'Help for Employees' (part of the government-backed 'Help for Households' initiative) offer exclusive benefits and discounts on products and services from over 200 business partners covering retail, healthcare, fitness, insurance, hospitality and entertainment.

This relatively small investment can save employees up to £3000 annually depending on their lifestyle.

2. Flexible Working Options

A recent report from Glassdoor states that flexible working has helped 58% of hybrid workers with the rising cost of living. The study also revealed that 23% of employees said the cost of commuting adds to their financial problems.

If possible, offering flexible work arrangements can provide immediate financial relief.

3. Car Sharing Opportunities

Organising a car sharing scheme requires some coordination but can significantly reduce travel costs and parking fees. You'll need to:

• Communicate the initiative

• Find out who's interested and where they live

• Use this data to find suitable pairings

4. Employee Assistance Programs (EAPs)

EAPs provide access to professional counselors, legal and financial specialists who offer confidential support. Employees can access help via phone, email, live chat, and if necessary, be referred for structured counseling.

Having external support is valuable for staff who feel uncomfortable approaching managers about financial concerns.

5. Salary Sacrifice Schemes

These tax-friendly programs help employees purchase more expensive items like cars, laptops, and phones, or pay for childcare vouchers, gym memberships, and personal learning. A salary sacrifice scheme reduces the employee's pre-tax earnings in exchange for their chosen non-cash benefit.

Cycle-to-work schemes can also be included, helping with both finances and physical wellbeing.

6. Cash Plans for Healthcare Expenses

Cash plans provide access to healthcare benefits like dental treatment, physiotherapy, and opticians services. Employers pay for the plan, and employees can claim back treatment costs, meaning their salary stretches further and reduces anxiety over unexpected healthcare expenses.

Companies offering cash plans often see reduced employee absence and improved physical and emotional wellbeing.

7. Financial Education

Perhaps one of the most valuable forms of support is knowledge. Offering seminars and webinars on financial topics provides lasting value. Consider:

• Inviting qualified guest speakers

• Partnering with reputable charities that offer free support

• Covering topics from retirement planning to debt management and budgeting

8. Innovative Solutions: Payroll Autosaving

In response to rising costs, some companies like SUEZ have introduced payroll autosaving schemes. Working similarly to pension contributions, employees can set aside a predetermined amount from their pre-tax salary each month.

Unlike pensions, employees can access these funds at any time, providing flexibility while encouraging savings habits. SUEZ reported an 18.5% reduction in absence rates since implementing this program.

9. Review and Communicate Your Benefits Package

Understanding what employees need right now is key to creating successful rewards and benefits. Equally important is clearly communicating what your package offers so employees can take full advantage.

Normalising Financial Wellbeing Conversations

Ideally, organisations should work toward normalising discussions about all aspects of mental health, including financial wellbeing. This happens when topics are addressed openly and candidly by everyone from leadership down.

Align Support with Company Values

Any financial wellbeing initiatives should align with your company values and workforce needs. Taking thoughtful action now can bring future benefits for both employees and the organisation.

How we can help

If you’d like to discuss any of the possibilities covered in this blog, get in touch with us today on 0161 941 2426. We’re here to help.