Many people know the phrase employee wellbeing and are also familiar with the idea of financial benefits being offered to employees, but in recent years we have seen the growth of another buzz phrase in our industry – financial wellness benefits.
The best description of a financial wellness benefit scheme is the implementation of a set of services and benefits that help employees find balance and control over their finances. In a recent report ‘the DNA of Financial Wellbeing 2017’, over a third of staff said their biggest worry in the workplace was financial – this is a huge percentage of the UKs workforce and something that can’t be ignored. This is why financial wellness benefits in the workplace will become increasingly valuable and over the next few years we expect to see the following trends:
The cost of inflation will drive demand and growth
The fact that so many people worry about their finances is not something that will surprise you and I am sure that if the same survey was repeated in 5 or 10 years’ time, finance would still be a big worry. The cost of living in the UK is on the up, especially in the big cities. Costs which are a necessity, but out of our personal control, are rising such as rents, travel and even basic groceries. All of this is making life more difficult for people and, as the government looks for solutions to better support those classified as JAMs (Just About Managing), employers are under increasing pressure to do more to support their employees by offering financial wellness initiatives.
Companies will be doing far more to help
Over the last year the growth in implementation of schemes to assist with financial wellness has become a trend in itself and is set to continue. Companies are now offering employees access to independent financial advice through external services that aim to improve their financial wellness. This may be to help them save for a new car, holiday, to buy a house or put their kids through school. It may also be about planning for the future, or for retirement.
Whatever the reason, employers have cottoned onto the fact that, in the absence of being able to increase salaries and paying big bonuses, they will need to do more to support the financial wellness of their staff. Addressing and improving employees’ financial wellness can be mutually beneficial for everyone.
Helping employees address and manage their financial wellness can reduce stress in the workplace which in turn can increase productivity, reduce absenteeism and staff turnover as well as having a positive impact on loyalty and employee branding. Organisations are increasing their budgets to help address these issues as they realise the value of this investment. The companies that are setting the benchmark when it comes to employee engagement and loyalty are substantially investing in this area and we see this expenditure set to continue and grow.
Financial wellness will evolve well beyond financial planning
We live in an increasingly diverse world, mirrored in the modern workforce that includes a mix of socio-economic, age and cultural groups. Consequently, there are a wide range of financial issues and stresses that impact a modern workforce with no one-size-fits-all solution that meets everyone’s needs.
Therefore, employers must take the time to understand the needs of their employees both from a financial and lifestyle perspective. If their workforce is financially affluent and well-rewarded then the opportunity to seek financial advice and plan for the future is very appealing. Other Employee Benefits such as discounts on car leasing or luxury brands might also be well-received. At the other end of the spectrum (JAMs) employees may appreciate more immediate financial advice to help them manage day-to-day expenses. In these instances, a workplace discount programme helping staff saving money on a weekly shop or other necessities might also be valued.
As companies become more aware of the financial challenges facing their employees, they will be able to expand the benefits available to them, enabling greater savings and long-term planning and security. But this will be driven by a smart team, listening and understanding the needs of their workforce.
Financial wellness benefits will become part of the norm
In the same way we have seen the evolution and integration of salary sacrifice, voluntary benefits, reward & recognition and employee discount schemes into more bespoke employee offerings that form part of the HR and talent management & acquisition strategies, we will also see Financial Wellness follow this path.
It is clearly an important piece of the pie and something that directly addresses the needs of employees but every workforce has its own culture and challenges – it’s what differentiates one company from another. Financial wellness benefits schemes will become more commonplace as organisations take greater responsibility for the overall wellbeing of their employees. But, they will evolve to include a wider range of financial benefits such as discounts, healthcare, pensions and other money saving and financial services.
In the future, organisations will not look at financial wellness benefits in isolation but will start to integrate it as part of their company’s employee benefit scheme.
If you want to learn more about how employee discounts can tie into financial wellness programmes contact one of our engagement consultants today.