Amid cost-of-living crisis, employees value financial wellbeing benefits

Employees view benefits as an important part of their employment relationship. But as people’s priorities change, are companies offering the right benefits to their staff?

‘Extra financial help’

In a global survey by Benefex, an employee experience software company, only 13% of UK staff surveyed said that benefits at their organisation were closely aligned with their actual needs. Another 55% felt that benefits that were relevant to them would have a greater impact on their experience of work than anything else.

Benefits supporting financial wellbeing were the most valued by employees, cited by 65% in this year’s survey compared with 53% in 2022. In particular, respondents valued life insurance, health screening, critical illness insurance, dental insurance, pension, private medical insurance, childcare vouchers and income protection.

“During the Covid-19 pandemic, health and wellbeing was the urgent need. And now with the harsh impact on household finances from inflation and rising interest rates, the trend has swung towards any benefits that mean extra financial help in whatever form it comes,” explained Karl Bennett, chair of the UK Employee Assistance Professionals Association (EAPA).

Bennett highlighted the value of Employee Assistance Programmes (EAPs) in meeting the financial wellbeing needs of a diverse workforce. EAPs give staff access to counselling, practical advice and referral services to help people deal with personal and work-related issues.

“What’s needed is more targeted and proactive communications that makes sure staff know the EAP isn’t just there for a crisis, but is a talking and advice service that is also important for helping to deal with concerns and issues about financial problems and their ripple of effects into people’s lives at an early stage.”

Link between financial wellbeing and mental health

Separate research shows that the UK’s largest companies increasingly recognise the link between financial wellbeing and employee mental health.

Investment company CCLA found that 43% of organisations in this year’s Corporate Mental Health benchmark had published a formal policy explicitly acknowledging the link between financial wellbeing and mental health. That’s up from 26% last year, with the cost-of-living crisis thought to be a factor behind the change of attitude in this area.

Employers can play an important role in improving the mental wellbeing of their workers, said CCLA chief executive Peter Hugh Smith.

“This includes paying people enough and fairly, offering secure, good-quality jobs, and providing benefits that extend the value of their pay.”

Five-point plan for improving financial wellness

In addition to offering fair and competitive pay, there are several other ways in which employers can help improve employees’ financial wellbeing, says employeebenefits.co.uk. These include:

1. Understand that each employee will have their own unique financial issues and worries, and offer resources and support schemes that cater to their specific needs and priorities.
2. Offer employee discounts, ideally on products and services that are daily necessities.
3. Encourage salary sacrifice for useful, non-cash benefits such as gym membership, a bicycle or a company car. With salary sacrifice, employees save money on National Insurance and effectively end up paying less for their chosen benefit than if they’d bought it independently.
4. Provide financial management advice, including financial coaching and debt counselling, to help your employees gain control of their personal finances.
5. Enhance your pension scheme to boost their confidence in the future.