There used to be three certainties in life; birth, death and taxes. It seems we can add a fourth: financial anxiety.
It’s no wonder with such a widespread malaise that we often speak with employers who have added creative additions to their reward offering but have had a disappointing take up. Whilst many benefits do make financial sense they are, in the scheme of things, just sticking plasters for many employees.
Financial wellbeing could be the answer.
It’s often added to the reward mix alongside health and wellness strategies as part of a wider employee deal - thought of as the bells and whistles of an employee value proposition .
But I think it should be part of a company’s pay foundations. Once employers have established that their cash offerings (base pay and bonus) are fair, equitable and transparent, financial wellbeing should be the nuts and bolts for the building blocks of reward.
After all, many other reward elements rely on employees being able to make sound financial decisions based upon:
- Ensuring affordability – balancing pension contribution levels or flexible benefits choices against other outgoings or debt
- Considering the short and long term – preparing for retirement whilst addressing current financial concerns
- Taking a holistic approach – making benefits choices that make financial sense given household circumstances and aspirations
- Understanding complex financial products - at work or in the wider market such as savings and insurance vehicles or pension freedoms
With stagnant wages, increased life expectancy, and an uncertain economy and job prospects, helping employees get financially fit is paramount.
Financial wellbeing programmes can be structured in many ways, including a needs assessment, individual counselling, group workshops and on line tools. It can cover topics such as budgeting, cash flow, credit and debt management, school / university savings plans, understanding credit reports, insurance, investments and inheritance tax planning.
Helping employees improve basic money management skills, reduce high-interest debt and save for retirement is a win for the employer too. Employee productivity increases, engagement and perceived work life balance are enhanced, and absence reduces. Thus improving attraction and retention.
And importantly it gives employees the knowledge to assess your reward and benefits programmes, know what’s right for them and participate fully with the options on offer. It gives them back control over both their here and now and the longer term.
Image adapted from Bells by Warlock D.