Do you know about the personal financial wellbeing of your employees?
Earlier this year, I wrote a guest blog post for Nikki Ramskill, the Female Money Doctor. Nikki is a medical doctor and she sees first-hand the effect that financial worry has on people’s health. In my article I said that “A caring employer who wants to benefit from a healthy, happy and productive workforce should be thinking about how to provide financial advice.”
I am returning to this subject as it is dear to my heart and there has recently been a study by the Institute for Employment Studies (IES) into employee financial wellbeing guidance in organisations.
This study looks into what employers can do to support the personal financial wellbeing of their employees and why they might want to.
Of course, these are the extremes, but many people are in debt and are unable to save. They are struggling to pay mortgages or rent and to feed and clothe their families. Other studies over the years have come up with statistics such as: 40 per cent of adults say they are not in control of their finances; only 28 per cent of people have a savings buffer equal to three months’ income and a third of employees state financial worries are their biggest concern.
All of this will inevitably have a negative impact on the health of your employees. It will give them higher stress and anxiety levels and affect their ability to sleep, their concentration levels and their absence due to sickness. If they are suffering, then your business is also suffering. They will not be performing well. Their decision making will be affected. They will have a reduced ability to concentrate.
You may be paying well and providing other benefits on top, but are you aware of the financial health of your employees? If not, then you may be missing out on a good way to improve productivity, employee engagement and your employer reputation. There are many low cost or even cost-free ways to help your employees to enhance their personal financial wellbeing. And if you help them, then you are helping yourself too.
How can I help?
You could start by setting up an employee financial wellbeing strategy. This does not have to be difficult. It would be a good start to look at all the help you already provide and put it all into an easily accessible package. You probably provide help already, but not in a clear format.
You can also signpost employees to help which is available for them – usually at no cost. There are all kinds of support mechanisms, debt counselling, financial guidance, pension advice, savings schemes, etc which is available if employees know where to look.
Sometimes all that is needed is some financial education. People are frightened of managing their finances because they feel they don’t have the skills or knowledge.
But I don’t want to invade their privacy
In these days of enhanced data protection, identity theft, invasion of privacy, employers are nervous of enquiring into the personal finances of their employees. But you don’t need to know specific details, unless the employee wants to share it with you. Additionally, you might assume that your employees have adequate knowledge to make decisions about their finances – especially if you already provide advice on things like pensions and flexible benefits. But the IES study found that that many employees would positively welcome some engagement from their employer to help them to resolve any difficulties they may be facing.