As interest rates rise again and pay fails to keep pace with the rising cost of living, many employees will be anxious about making ends meet. Employers will need to ensure any financial wellbeing support they offer is genuine, writes Chieu Cao.
In the current climate of high inflation and rising interest rates, workers need as much employer-provided financial wellbeing support as possible.
According to Mintago’s recent research, 39% of UK employees are either “very” or “somewhat” stressed, while a significant majority (62%) attribute their stress to the rising cost of living.
Encouragingly, the notion of financial wellbeing support has been increasingly important for businesses, with many organisations implementing initiatives that are designed to enhance the financial lives of their employees.
However, while it’s important to recognise that some employers have gone to great lengths to scale up the support for their employees, many businesses have unknowingly implemented measures that do little to improve financial circumstances.
These businesses could be “financial wellbeing washing” their employees. It’s vital that leaders and HR have a firm grasp on the implications of this, especially during the cost-of-living crisis.
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What is ‘financial wellbeing washing’?
Essentially, the term refers to when organisations implement support measures that do little to improve their employees’ financial situation, using a tick-box approach without adequately addressing their fundamental financial concerns.
Mintago’s recent research revealed that 51% employees say their employer has implemented financial wellbeing support, but less than a third (29%) say that their financial circumstances have improved as a result.
Unfortunately, a sizable disparity exists between the support provided by employers and the actual improvement in their workers’ financial situations. This disconnect is not only disheartening but also has the potential to inflict harm upon a business.
Employees burdened by financial concerns often experience elevated levels of stress and diminished job satisfaction, both of which exert a detrimental influence on job performance and productivity.
Comprehensive approach to financial wellbeing
There is not only a moral case for embracing more impactful support measures, but a business one as well.
Employers must implement a more comprehensive approach to financial wellbeing. This requires an open discussion about the support that will be of the most value to the workforce.
Employers could consider conducting surveys or one-to-one discussions to gain insight into the challenges their staff are facing, for example. In doing so, they can ensure that the support on offer genuinely aligns with the needs and aspirations of the workforce.
An additional advantage of adopting such an approach is that it cultivates a culture of open discussion around financial challenges and encourages employees to feel more comfortable seeking support. Concerningly, according to Mintago’s research, only 31% of workers currently feel able to ask for help regarding their financial wellbeing.
Employees burdened by financial concerns often experience elevated levels of stress and diminished job satisfaction, both of which exert a detrimental influence on job performance and productivity.”
Robust support mechanisms
Once more effective lines of communication between employee and employer have been established, business leaders and HR managers can better design the support mechanisms needed to improve their workforce’s financial wellbeing.
When deciding which measures to implement, there are some key things to focus on.
Firstly, it is important to recognise that many employees may lack the financial literacy skills required to confidently navigate their financial lives. As such, businesses could implement financial education programmes, workshops, and training to equip their staff with the knowledge and tools necessary to make informed decisions about their money.
Connected to this, making independent financial advisors (IFAs) available to a workforce can be valuable. This kind of support acknowledges that each employee may have distinct financial goals and challenges, and IFAs can deliver a robust financial strategy that is tailored to their unique circumstances.
Finally, offering tools – such as online financial wellbeing platforms – that make it easier for employees to gain a better understanding of their financial lives can be of great value. These platforms enable employees to monitor their expenses, set financial goals, and even track down their lost pension pots, helping them to consolidate their finances for both the short-term and long-term future.
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Given how difficult the economic environment continues to be, businesses must avoid “financial wellbeing washing” their employees and ensure the support on offer goes beyond a tick-box approach. By prioritising genuine and impactful financial wellbeing support, employers can create an environment where employees feel valued, supported, and empowered to achieve financial security. This not only benefits individual employees, but also leads to a more engaged workforce and productive business as a whole.
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