Financial Wellbeing 2023

With mortgage interest rates increasing three times since the start of 2023 and inflation continuing to rise (probably as we write this), it’s no wonder employee surveys are highlighting financial worries as a common cause of concern. Even with a small reduction in energy bills from next month, people continue to be worried about their financial wellbeing and how to cover household bills.

The Centre for Economic and Business Research (CEBR) report one in ten employees have missed days at work due to financial problems and over a third of employees are distracted at work by debt concerns.

While many organisations recognise their role in supporting the changing needs of their employees, many are failing to do so, often worrying about the cost of providing such financial benefits. Increasing salaries might be an immediate thought but might not be a viable option for smaller organisations.

Whether you’re starting out on the journey or looking to do more to ease financial worries, there are plenty of existing and new, cost-effective ways for caring companies to support employee financial wellbeing.

Financial wellbeing starts with listening

Before you take any decisions on how to help your employees with their financial wellbeing, start by listening. Use all the channels you have and focus on the messages your people are sending. Take note of employee survey results and EAP data. Ask managers to look out for changes in team behaviour. Consider holding focus groups and consulting with staff representatives and committees.

Listening will give you all the information you need to select the right support for your employees.

Offering choice and flexibility is the best way to go. So let’s take a look at some cost effective ways to help your employees through the cost of living crisis, including:

• Salary Sacrifice

• Cash Plans

• Financial Rewards

Salary sacrifice schemes

Salary sacrifice is when payments or contributions are taken from your salary before tax is deducted, effectively reducing the amount of tax you pay. We often think of them as a way to save money without even noticing the money is gone. Common examples include share schemes, childcare vouchers, and cycle to work initiatives, the latter having the additional benefit of supporting physical wellbeing.

Cash plans to cover healthcare expenses

Cash plans provide employees with access to a range of healthcare benefits, such as dental treatment, physiotherapy and opticians services. Paid for by the employer, employees can claim back the cost of treatments such as an eye test or dental care. It means their salary goes a little further and removes anxiety over the cost of unexpected treatment. Some schemes extend their benefits to complimentary and holistic therapies, counselling and access to private healthcare.

Companies that offer cash plans have been found to have reduced employee absence and overall improved physical and emotional wellbeing.

Financial Rewards

There are several ways to help your employees though the cost-of-living crisis through reward and recognition. Here’s a summary:

• Popular amongst younger age groups, access to retail discounts can help to reduce the cost of groceries, clothing, leisure and entertainment.

• Recognising strong performance through performance related pay and bonus schemes, usually through salary increase and/or a cash lump sum.

• A life insurance scheme could ensure an employee’s family is supported financially and able to cover living costs following their death.

• Workplace pensions can relieve anxiety around funding retirement and living costs in later life.

• If you don’t offer it already, sick pay can be a huge benefit and relief to employees who would otherwise lose out financially if they’re unwell.

Financial Education

Perhaps one of the most valuable forms of support any company can offer is knowledge. It’s something that stays with us forever and gets passed down through the generations.

Younger employees may have never thought about getting a pension, others may think they can’t afford to put money away or want to improve their financial awareness.

Offering seminars and webinars on subjects people would like to know more about is a low cost solution. You might invite guest speakers or partner with charities that offer free help and support. Be sure to check any speakers are trustworthy and reputable by checking they have the relevant qualifications and accreditations.

Financial education can cover anything from retirement planning and pensions, to managing debt and budgeting. It’s all about giving employees the chance to learn how to manage their finances now as well as start planning for their financial future.

Case Study - Payroll Autosaving

In response to the rising cost of living, the recycling and waste management company, SUEZ, introduced an innovative payroll autosaving scheme. The scheme works in a similar way to a pension in that employees can pay in a set amount from their pre-tax salary each month. It makes it much easier for employees to set aside savings or build up a contingency fund for emergencies.

Unlike a pension, employees can access their pot of money at any time. The flexible scheme benefits those on lower salaries and allows people who have never had a savings account to save money and feel more secure about their financial situation.

At SUEZ, improving the financial wellbeing of its employees through payroll autosaving has not only had a positive effect on employee experience, it has also seen unexpected improvements in absence rates, a reduction of 18.5% since 2019 – saving the business £640,000. See full case study here.

Align financial wellbeing support to your values

Responsible employers are looking for new, creative ways to support their people through the cost-of-living crisis.

Any big changes, such as the autosave scheme example above, are likely to require employee consultation. Our advice is to do your research, make informed choices by listening to your employees, and be sure to keep the conversation going. The support or schemes you provide should align with your company values and the needs of your team.

Taking a risk now could bring future benefits for both employee and organisation. If you have any concerns or would like to discuss strategy, please get in touch.

Further reading

To explore other aspects of employee health and wellbeing, take a look at our Mental Health News Roundup and our eBook Wellness: Physical and Mental Health.

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.