An action plan to understand employees’ financial needs and act on the findings
Imagine how staff would perform if they all had a strong sense of personal financial freedom?
Step 1 - Get the facts right
Working out the state of financial wellbeing of your workforce is essential to help you determine what initiatives you should focus on, as well as to allow you to measure progress made over time.
Drill into data that is already available
Obvious metrics to look at include: pension opt-out rates, flex benefit take-up and engagement with online benefits information. However, levels of absenteeism and attrition also matter.
Our financial wellbeing research (2018) found that those who are worried about money take 1.5 sick days a year due to financial stress and are 2.3 times more likely to be looking for another job. They are also 7.6 times more likely not to finish daily tasks and 5.7 times more likely to have troubled relationships with colleagues.
Most money decisions are made at an emotional, not a logical level. Age and salary are both quite poor indicators of levels of financial wellbeing.
Financial fitness scoring
A Financial Fitness Score survey will allow you to understand how your employees actually feel about their finances. They will be given a score from 1 (low) to 5 (high) based on their answers to ten simple questions about their attitudes and behaviours relating to their money. This score is not designed to segregate people into being ‘good’ or ‘bad’ with money, but to drill into the specific nuances that make-up how people act in relation to money. The aggregate score of all participants also provides a benchmark for the entire workforce, which is useful when trying to create a business case for financial wellbeing.
Listen and you will learn
One of the best ways to measure the current reality of financial wellbeing is to listen to employees and how they feel about their finances. Focus groups are an obvious choice, but you might get limited take-up. An alternative would be to set-up one-to-one interviews conducted by an external agency. Employees’ personal details could remain private throughout the process, while ensuring a wide demographic of the employee base is profiled and their data captured. The interviews would be a cost to the business and take some time to organise, but would provide the kind of qualitative data that surveys can’t offer.
Step 2: Focus on high-impact solutions
There is no one-size-fits-all solution for helping improve employees’ financial wellbeing, so you’ll probably need a combination of solutions based on what your analysis is telling you.
The Money & Pensions Service’s Financial Capability Survey (2018) found that 63% of adults do not feel in control of their lives when it comes to money. 17% of adults are indebted and only a third receive help for this. Our financial wellbeing research (2018) mirrors this. For those who are experiencing high levels of financial uncertainty, the top priority employee benefits are those that help them in the short-term, such as advances on pay and access to low-interest loans.
We’ve found that an initial focus on easy to deliver solutions that quickly offer a high impact for employees makes sense and provides a basis for each employer to build on. For many this is helping with the most immediate financial pressures: getting out of debt, avoiding high-cost credit and then starting to build a savings reserve.
Step 3: Communicate your benefits effectively
Whatever financial wellbeing solutions you offer, the key to good take-up and tangible results, is effective communications. Treat financial wellbeing support as you would any marketing campaign. You want employees to be aware of, engage with, and make use of the products and solutions, without promoting a specific course of action.
Each workforce is different, so tailoring and targeting the message is key. Try different messages and channels to see what works best. Higher earners are a challenging group to engage, but tapping into their pain of loss can work well, so messages related to tax issues can be a useful way to reach this group. Low earners can be difficult to engage with pension savings. So, asking a question like ‘are you leaving your free money on the table?’ is far more interesting than ‘understanding your pension plan’.
A personalised letter to employees at home, signed by a senior manager, can be a more effective call to action for attending financial wellbeing events, visiting a financial wellbeing portal or actively reviewing benefits, than any number of emails, texts, office posters or announcements.
Offering different events such as live presentations (including the ability to watch a live stream or on demand), live webinars (including on demand) and money workshops can be very effective. However, the timing of events is also key. We found that offering an evening webinar option, in addition to daytime, increased attendance significantly at some employers. Allowing staff to attend a live talk (or webinar) in work time also improves attendance and reinforces the employer’s support for financial wellbeing.
Step 4: Remember that culture eats strategy for breakfast
Getting the right mix of benefits is key but means very little if you don’t have the right culture embedded into the business.
Bring senior leadership with you
It’s vital to ensure that the senior leadership team understands what financial wellbeing is and have genuinely ‘bought into it’. There are probably some senior leaders in your organisation who are not naturally great with money, and could become great advocates for your financial wellness programme.
Financial wellbeing first aiders
Financial first aiders could become the ‘go-to’ people for anyone who is going through any form of financial stress. Our research showed that the majority of people seek the advice of friends and family over online help, banks and financial advisors. Your employees want to talk to someone they trust. Financial first aiders can listen and explain the resources that the organisation has available and any other resources that could assist them.
Share stories
Finances are a matter of the heart, not the head. If you can get people sharing their stories, you will be helping to stamp out the stigma surrounding financial health and enable employees to move from a place of fear to a place of confidence.
An effective financial wellbeing plan is a structured, iterative and puts your values as an organisation at the heart of your plans. Ultimately, you want to be able to offer solutions that will make real improvements to your employees’ lives.
This article was provided by Salary Finance.
In partnership with Salary Finance Inc
We understand the impact finances have on our health, our happiness, our home life & our work life.
