The past year has left many people worrying about their finances. While some have seen their jobs disappear, even those still in work may be struggling. For example, their hours may have been reduced, their partners may have lost their job, or they may have more caring responsibilities.
Employers can help by providing access to information, advice and education on financial matters.
In fact, there is a moral and business case for supporting your employees' financial wellbeing. As the Chartered Institute of Personnel and Development (CIPD) explains, money worries affect our mental and physical health, which in turn can affect work performance.
A financial wellbeing policy acknowledges that, as income providers, organisations play a vital role in their workers' financial wellbeing. It can be as simple as a commitment to signposting to independent money and debt guidance, offering access to low-interest loans and running pension workshops.
Yet new research shows that half of employers (49%) don't have a financial wellbeing policy in place.
That's not to say that employers aren't doing anything to help people who might be struggling financially, however. The CIPD's Reward Management Survey, which included 420 UK employers, found that:
- 12% of employers have introduced, or plan to introduce, a financial wellbeing policy in direct response to the pandemic (29% already had one)
- 19% are planning or considering becoming an accredited Living Wage Foundation employer (a further 18% of employers are already accredited and another 18% already pay the 'Real Living Wage' without being accredited)
- 24% of employers have explored how the pandemic has impacted their employees' financial wellbeing, so they're better able to identify the right kind of support. Another 18% plan to do so by the end of March 2021
- Nearly a third (30%) of employers say the pandemic and the economic crisis has prompted them to consider how fair their pay and benefits are. A quarter (25%) are taking corrective action or plan to do so
"We've seen many employers really step up to the plate when it comes to supporting their employees' mental wellbeing during this crisis, and we'd like to see the same attention given to their employees' financial wellbeing," said Charles Cotton, senior performance and reward adviser at the CIPD. "For too long it's been considered the poor relation to wellbeing but we know the two are intrinsically linked and should have parity."
The CIPD recommends that a financial wellbeing policy should include:
- Signposting to financial wellbeing advice, such as the resources available from the Money and Pensions Service (which small employers can do easily)
- Targeted financial education support at key moments in working lives, for example ahead of maternity leave
- Revising benefits packages to include finance-friendly initiatives, like giving employees the option to choose how often they're paid
- Implementing flexible working policies so employees with caring responsibilities can balance working enough hours to comfortably pay their bills
- Giving people security over their hours and helping them to progress into higher-paid roles
- Committing, where possible, to paying all employees at least the Real Living Wage