The impact of Covid-19 has had an undeniably profound effect on the wellbeing of the UK population with one in five adults experiencing depressive symptoms in early 2021, more than double that seen before the pandemic. Whilst most employers may have already implemented a traditional mental and physical wellbeing strategy, a recent CIPD survey found that only half of employers have an effective financial wellbeing strategy in place. With the uncertainty that the pandemic has brought, HR teams need to prioritise creating their own financial wellbeing framework for the health of their workforce.
Exposing new vulnerabilities within the workforce
Encouraging presenteeism and preventing long-term sickness brought on by financial stressors is a fundamental reason for HR teams to implement a financial wellbeing strategy, with absenteeism and workplace illness caused by financial stress costing businesses approximately 4% of payroll costs per year. Whether staff have concerns relating to debt, mortgage repayments or financially supporting dependants, it is understandably difficult to leave these worries at home during the working day. With recent research finding 10.1 million people in the UK showing signs of financial difficulty and 2.4 million experiencing problem debt since the Covid-19 pandemic began, financial struggles are a common issue affecting employees across the UK, exposing new vulnerabilities within the workforce.
The importance of signposting
HR teams should be equipped to direct people to the appropriate support for the traditionally taboo subject of personal finances. This support may come from internal communications reminding employees about the services available in their benefits package, such as counselling through their Employee Assistance Programme, or signposting them to confidential debt support charities.
An effective financial wellbeing strategy also creates a desirable workplace culture that promotes productivity and helps to attract and retain staff. It should look at both short term and long term financial planning, and tailor this to suit the workforce’s demographic. For instance, employees approaching retirement are more likely to engage with their savings and pension, however younger employees may need educating on how to look after their longer term finances. Recent research by the Office of National Statistics found that 47% of those under 30 years reporting that they could afford an unexpected expense compared with 71% of those over 60 years.
Encouraging employees to set goals
The uncertainty that Covid-19 has brought to all sectors over the past year has shown how important it is for all employees to look at their own financial resilience, and consider what they can do to improve their financial situation. Encouraging employees to set personal savings goals or engage in savings schemes and ISAs provides the additional benefit of keeping employees motivated, as they work towards promotions and in turn, boost their savings pot, whether this is for unexpected life events or to purchase a property.
It is promising to see that there are a growing number of employers looking to implement a financial wellbeing strategy . This shows that more HR teams are starting to see the value of financial wellbeing, which will lead to a happier and healthier workforce all round.
Guide: The 5 key stages to implementing a workplace financial wellbeing strategy
In a changing world, the financial wellbeing of your people is more important than ever. In this guide we explore 5 key areas of financial wellbeing that can help support your people in 2021 and beyond.
(Office of National Statistics, 2021)
(National Wellness Conversation, 2021)
(Office of National Statistics, 2021)
(Rewards & Employee Benefits Association, 2021)