Nearly a third (32%) of employers say the pandemic has accelerated their plans to improve the financial wellbeing of their staff.
Research involving 171 organisations found that more than one in three (36%) employers believe Covid-19 has had a negative effect on employees’ financial wellbeing – particularly in sectors that have been hit hard by lockdown restrictions including hospitality and travel.
Despite this, 62% of employers do not have a formal financial wellbeing strategy, the Willis Towers Watson Future of financial wellbeing survey finds. However, many expect to introduce or increase financial provision over the next two years: 46% want a strategy that is connected through a consistent brand and is well communicated to employees, while 36% want to offer personalised support.
Three quarters say their employees want them to take a more active role in supporting their financial wellbeing.
Richard Sweetman, financial wellbeing lead at Willis Towers Watson, said: “Organisations realise employees are currently facing a wider array of financial challenges and are looking to evolve from a focus on helping employees save for retirement, to adopt broader financial wellbeing programmes that provide the help they need. Many employers are now accelerating their focus on financial wellbeing in response to Covid-19, and the associated economic impacts.”
The top four reasons why organisations want to focus on financial wellbeing are: to incorporate it into a more holistic wellbeing strategy (88%), to enhance and modernise their benefits package (68%), to meet their duty of care towards employees (60%), and to help them meet business objectives through enhanced engagement and reduced absence (51%).
The type of financial benefits employers plan to offer is also shifting. Thirty per cent are considering introducing corporate ISAs (11% currently offer this); 25% general savings or investment accounts (18%); and 23% a corporate lifetime ISA (5%).
They expect these benefits to be complemented by a range of educational and support programmes. Over the next two years, 52% expect to consider the provision of “nudges” based on pivotal financial decision points; 49% want to offer financial wellbeing self-assessment tools; 48% want to introduce apps that help staff with budgeting and spending; and 44% expect to offer financial education seminars.
Sweetman said: “With the importance of financial wellbeing in the workplace now acknowledged by most employers, the challenge organisations face is how to design and deliver a successful programme. Research on employee behaviour has shown that simply providing more options to employees is unlikely to be successful if it is not supported by effective communication and decision support.
“A well-structured financial wellbeing programme will not just provide tools and apps but also coaching, seminars and guidance for employees, to help them make better financial choices. To be most effective, programmes need to relate to individuals’ circumstances and be communicated at moments in time most relevant to the employee.”