Financial Wellbeing – How can Employers Help?

In this article, Laura Findlay, from our partners at IHRS, continues to look at wellness, using the ‘Eight Dimensions of Wellness’ model.

The ‘Eight Dimensions of Wellness’ model considers multiple factors that contribute to a person's overall quality of life.

This article focuses on financial wellbeing.

Financial wellbeing refers to an individual feeling confident and in control of their current and future financial situation. This means they can manage resources to live within their means, make informed financial decisions and investments, set realistic goals, and prepare for short-term and long-term needs or emergencies.

                         

Finances play a critical role in employee’s lives, and not having enough financial security can increase stress and anxiety, impacting their health and resulting in poor performance at work or absenteeism.

A Reward Management survey, conducted in March 2021 by the CIPD, showed just under half of employers have a financial wellbeing policy in place.

A financial wellbeing policy is key in any business’ approach to wellbeing. Even within companies where finances may be restricted, it is important to have a policy in place that shows employees you are supportive and informs them of external resources, should they need them.

The CIPD suggests that any employer can begin to build a financial wellbeing policy with these three simple steps:

  1. Let your workforce know that they can get free, confidential and independent money and debt advice from the government's Money and Pensions Service
  2. Make sure your workforce is fully aware of all the benefits you currently offer and how to make the most of them. For example, many employee assistant programmes offer financial advice.
  3. Begin a dialogue with employees and line managers about the financial challenges and opportunities they face and the business. This will show your concern and help to break down the stigma associated with money problems.

Statutory Sick Pay

Research from The Money and Mental Health Policy Institute found that financial pressures are a common reason for employees returning to work early from sick leave, even when they aren’t fully recovered. This is obviously not something employers want from employees, especially as we emerge from a global pandemic. Employers must pay Statutory Sick Pay (SSP) for up to 28 weeks. This is currently at the rate of £96.35 per week.

Encourage Employees to Ask for Help

During the pandemic, a number of businesses within the financial sector have introduced additional options for those who are struggling. Some banks, such as NatWest and TSB, have been offering customers the ability to delay their mortgage payments. Many insurers are also offering options, such as reviewing cover requirements to reduce premiums, forgoing administration fees and amending payment dates.

Whilst the availability of much of these options will depend on an individual’s circumstances, if implemented, they could drastically reduce the impact of facing financial difficulties. However, it's important to emphasise that any delayed payments will still need to be made at a later date; repayment periods may be extended or potentially, a small amount could be added to future bills to adjust for this.

Vulnerable Customers

Following the FCA’s guidance, many businesses in the financial services sector are required, under the Principles of Business, to understand the needs of vulnerable customers and provide additional or alternative services to meet these needs. This can aid those who face further difficulties when managing their finances, such as illness or disability, or those struggling with life changing events, such as bereavement or a relationship breakdown.

Additionally, many financial services providers also have coronavirus specific sections on their websites with further information and support. There are also charities that specialise in providing financial information and guidance, such as StepChange and The Money and Mental Health Policy Institute.

Employers should support employees by directing them to available advice or assistance to help them feel better informed and supported when making important decisions.

Cyber Security

Unfortunately, with people spending more time at home and online during the pandemic, financial scams increased at an alarming rate. Criminals are targeting people by sending out fake emails or texts, pretending to be the government or local health authorities, with information about Covid-19 or the vaccination programme. These communications often contain links to malicious websites or can infect the device with malware.

Helping employees to be aware of potential fraud could prevent someone who is already vulnerable from ending up in even more difficult circumstances.

Businesses should support their employees in working towards living longer, healthier, and happier lives.

There are many elements to consider when looking into financial wellbeing. If you would like practical guidance or support in setting up an employee assistance programme, implementing a Financial Wellness policy or on employee and employer rights, regarding sick pay and leave, please do not hesitate to get in touch with the team at IHRS – email HRhelp@ihrsolutions.co.uk, call 01604 709509 or visit the website.

 

About the author

Laura is a HR professional with 20 years’ experience with Financial Services, the majority of which has been within insurance. In her role with UKGI Group, Laura provides objective support to firms on employment law and HR issues. She uses her interpersonal skills and knowledge to work with firms to help them develop strong and resilient HR strategies and establish healthy organisational cultures. Laura’s clients receive personalised support with a real can-do approach.

Laura is an Associate of the Chartered Institute of Personnel and Development (CIPD). She holds a Diploma Professional Development Scheme.

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