Financial wellbeing has evolved from a buzzword into a core pillar of employee wellbeing strategies. And rightfully so – with 57% of employees reporting that money worries are their number one cause of stress, employers have a unique opportunity to introduce life-changing solutions that support both their workforce and their business.
What is financial wellbeing and why is it important?
Financial wellbeing is the feeling of being in control of your finances, having the ability to manage day-to-day expenses, save for the future, and handle unexpected financial shocks. It’s not about being wealthy; it’s about making informed financial decisions that reduce stress and improve overall wellbeing.
Did you know that the average living costs have increased by 20% in the last 5 years? From what we put on our dinner table to how we heat our homes, people are feeling the strain across the board.
Without significant salary increases, employees are struggling to keep up, leading to increased stress levels and even job resignations. While pay rises may not always be feasible for businesses facing economic challenges, there are other impactful ways to support employees.
For employers, supporting financial wellbeing is not just about altruism - it’s also good business sense. Employees who feel financially secure are more engaged, productive, and less likely to leave unexpectedly due to financial stress.
Supporting employees with financial wellbeing
While a generous salary increase every year may solve a lot of these problems employees face, the reality is that it’s not a practical solution that is always within an employers’ control.
The best way to view a financial wellbeing solution is as a tool for empowerment - giving your employees the confidence to understand and manage their money in a way that works for them.
There are various ways your organisation can support employees financially.
Here are 5 key recommendations for companies wanting to better support their employees:
- Cost-saving mechanisms
Salary exchange schemes allow employees to increase take-home pay by keeping more of what they earn through tax-efficient benefits. For example, a pension salary exchange scheme allows employees to exchange a portion of their gross salary for additional pension contributions, boosting retirement savings for your workforce.
Other solutions, like affordable credit options, provide employees with financial flexibility, reducing stress and improving productivity - all while keeping costs manageable for employers.
- Access to financial education
Unbiased and accessible financial education and resources reduce uncertainties and improve overall financial literacy. Valuable financial education includes self-service learning journeys coupled with quizzes and self-assessments, monthly masterclasses and on-demand learning resources.
- Smart money management tools
A financial wellbeing solution isn’t just about helping employees make ends meet – it’s about providing tools that help employees manage short- and long-term goals, track their spending, set financial goals, connect their accounts into one platform, and project their retirement outcomes.
- End-to-end lifestyle support
Your diverse employee profile calls for a diverse solution. A financial wellbeing platform’s value really shines when it can be personalised and bring value to each employee, no matter what their current challenges and goals might be. To address the financial pinch our employees are facing - a deals and discounts platform is a great way to help employees save thousands on their monthly retail and grocery bills!
- Access to financial experts
Your employees need access to expert, tailored support for diverse financial challenges. This includes unlimited sessions with certified financial coaches on budgeting, debt management, investment basics, and financial goal-setting unique to each employee’s unique needs.
By integrating these solutions into your benefits package, you can reduce financial stress among employees, enhance retention, and build a more financially resilient workforce.
Employers can benefit from financial wellbeing solutions, too
Financial wellbeing solutions don’t just help employees, they provide significant advantages for employers as well. Investing in financial wellbeing can yield strong returns, including:
- Reduce your NI and tax bill with salary sacrifice schemes - salary exchange schemes are a no-brainer for employers who do not already have these set up.
- Advanced insights for HR teams – Gain valuable data and analytics on employee financial wellness, enabling more strategic decision-making.
- Better tracking of employee sentiment and wellness – Understand financial stress trends within your workforce and proactively address key concerns.
- Enhanced diversity, equity, and inclusion (DE&I) initiatives – choose a platform that supports diverse employee needs, including tailored guidance to empower women and reduce the gender pension gap.
- Improved retention and productivity – Employees who feel financially secure are more engaged, less likely to take sick leave, and more loyal to their employers.
- All-in-one benefits hub - Access all your benefits in one place with ease. Add, edit, or manage your benefits seamlessly.
By prioritising financial wellbeing, businesses not only support their employees but also strengthen their long-term success and competitiveness.
Speak to your usual Towergate advisor or email TIB@towergate.co.uk to find out more.
Sources
commonslibrary.parliament.uk/research-briefings/cbp-9428/
bigissue.com/news/social-justice/will-prices-uk-ever-go-down-cost-of-living-crisis/
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