Significant proportions of employees are facing increasing financial challenges. For example, demographic and policy changes, rising education and housing costs, an ageing population and rising state pension age, mean that the financial pressures facing employees are only likely to intensify over the coming years.
But why should employers be concerned if their employees are experiencing financial pressures? Well, in a nutshell, because poor employee financial wellbeing will ultimately impact upon an organisation’s bottom line. There is a wealth of evidence indicating that poor financial wellbeing impacts on health in terms of poor psychological wellbeing, higher stress and anxiety levels, and lower levels of good health. This, in turn, impacts productivity in terms of poorer job performance, reduced concentration, lower productivity and absenteeism. This provides a compelling case for employers to consider the financial health of their workforce and to reflect on their responsibilities and opportunities.
There is no one perfect solution to poor employee financial wellbeing. However, a good starting point for support would be to identify the needs of employees. [Employers could] consider segmenting the workforce by generation or income level in order to target relevant financial information based on their likely financial pressures. Also, if an employee is going through a significant life event, for example, marriage or the birth of a child, this can be used as an opportunity to target financial information to remind them to examine their changing needs and priorities. Communications can be refreshed about the benefits already on offer to employees that may help them save money and reduce spending. Or [an employer can] simply provide introductory links to external sources of help, such as charities that offer debt advice and assistance.
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Overall, by supporting employees’ financial wellbeing [an organisation is] demonstrating that [it is] a responsible and supportive employer, which can increase engagement and employee willingness to go the extra mile.
Catherine Rickard is senior research fellow at the Institute for Employment Studies