The UK is facing a personal savings crisis. Employees are failing to save enough; a third save less than £50 a month and 20% are saving nothing at all. Many find their savings are not effective with almost half* being confused about where to save, leading to savings being made into unsuitable products.
Employees of all ages and levels of seniority are facing tougher financial decisions than ever before. From younger workers, burdened with student debt yet aspiring to get onto the housing ladder, to those navigating complex decisions about how to fund retirement; the need to help employees feel confident about their financial future has never been greater. Financial wellbeing is a workplace-wide issue, not just something that affects a handful of workers.
Poor financial wellbeing is not only bad for individuals, it also impact business performance ** with at least a quarter of staff in the UK unable to perform at work because of money worries.
The relationship between staff’s overall financial wellbeing and productivity at work has become high profile for many employers in recent years. Wellbeing is no longer a slightly vague nice-to-have, but a measurable practice that, when implemented well, can deliver genuine benefits to businesses as well as to individual employees.
As a consequence, more employers are now looking at financial education programmes to help support employees, and raise their financial capability. By educating employees about finances and offering support to help staff manage their money, businesses can improve the overall wellness of their workforce; demonstrating a duty of care whilst also boosting business performance.
The good news is that employers are in a great position to help: they offer reward and benefits that can be used to improve personal finances; they can engage their whole workforce with trusted communications; and they can choose to include financial wellbeing as part of their overall staff wellbeing strategies.
For SMEs, these opportunities can be even more exaggerated and easy to implement:
- SMEs are closer to their employees and have more autonomy to make changes to workplace benefits simply and quickly, optimising spend on benefits that employees truly value
- Communications are more effective in smaller organisations; calling everyone into the boardroom can be easier with 20 employees than 2,000
- What’s good for staff is also good for business owners; financial worries affect everyone and in smaller businesses, business owners and their performance are a vital component of that businesses success
A good financial wellbeing strategy will go beyond just pensions and debt – it will raise awareness and confidence across all areas of financial wellbeing and workplace benefits. It will also signpost where staff can obtain further help and advice, and how to find a range of savings solutions alongside those offered in the workplace. This provides all employees with a framework to access the level of help they each need as and when they need it.
Financial wellbeing is about creating a healthy culture when it comes to money. Having a financial wellbeing strategy is a clear signal of your intent as an employer, and an inspiration for all your staff to take control and do something to improve their own finances. The result is a more positive and healthy life for your staff – and a more engaged, loyal and productive workforce for your business.
Investment in financial wellbeing is therefore not just a decision based solely on responsibility towards your employees, but also a simple step towards boosting your bottom line.
* Lifetime Savings Challenge research 2017
** CIPD/ Close Brothers Workplace Financial Wellbeing research 2017