Should you offer employees financial support?

Financial worries plague one in four employees, according to published research

Wellbeing in the workplace is often synonymous with physical and mental health; however, financial wellbeing is becoming more and more prevalent. According to the 2017 DNA of financial wellbeing report from Neyber, 58% of employees admitted to being mentally and physically affected by financial worries. With 33% of employees citing financial worries as the biggest concern, ahead of health, relationships and work life balance. These financial problems are not necessarily because of poor financial management, but increasingly external factors such as the rising costs of education and housing, depressed wages, rising childcare costs, and energy and food prices, are taking a toll on employees across the UK.

Acrosss the pond, two-thirds of North American employers offer their workers financial education, according to a new report from the International Foundation of Employee Benefit Plans (IFEBP) in Brookfield, Wis.

“Nearly half of organizations rate their workforce as only a little bit or not at all financially savvy,” said Julie Stich, CEBS, IFEBP’s director of research. “Employers are also reporting more financial challenges among employees today than five years ago and are seeing these challenges reflected in the day-to-day operations of their workplace.”

The IFEBP report, Financial Education for Today’s Workforce: 2016 Survey Results, includes responses from organizations in the U.S. and Canada. Employers—typically, HR benefit managers—revealed that their workers are struggling and stressed over:

• Debt (66 percent of respondents).
• Saving for retirement (60 percent).
• Saving or paying for children’s education (51 percent).
• Covering basic living expenses (48 percent).
• Paying for medical expenses (36 percent).

There is a compelling business case for providing employees with financial support. Businesses and organisations are feeling the impact of poor financial wellbeing and the potential impact it can have on productivity and health in the workplace. According to the CIPD in published data released earlier this year, 1 in 4 workers report that money worries have affected their ability to do their job. Household debt has also reached unprecedented levels: household debt is higher than in 2008 before the financial crisis.

Mark Scanlon, Chief Executive at Personal Group commented: “Offering additional support such as fairer finance schemes is a practical way employers can improve the overall wellbeing of their staff. This proposition is about offering practical financial support as part of an overall benefits package. We are enabling employers to address all aspects of their employees’ wellbeing, physical, emotional and financial through a truly holistic wellbeing programme.”

The news comes as Personal Group partners with Neyber and SalaryFinance, which will allow Personal Group’s clients to offer their employees access to financial wellbeing solutions including loans direct from salary, on-site financial education, and saving products.

Through the initiative, employees will have access to affordable borrowing with low APRs and manageable repayments that are taken directly from payroll.

As well as lending, employers may also wish to consider counselling in the area of debt. According to SHRM, “debt counseling—whether provided by an independent financial planner, through an employee assistance program or as a service within an employee wellness program—can be a central part of securing an employee’s financial outlook – helping employees to live within a budget and to make a financial plan can take away the stigma and stress associated with financial uncertainty.”