An essential part of being a great employer is having those open conversations with employees about their financial wellbeing.
With the soaring cost of living as well as everyday expenses such as childcare and travel costs, it is up to you, as an employer, to use the most effective ways to support employees financially.
Talking about money is something many people still find a ‘taboo’ subject, and employees often find it uncomfortable to address.
With it being Talk Money Week 2021, we thought it was important to explain why employers should discuss pay more openly with their workers.
Why should employers prioritise their employees’ financial wellbeing?
Distress relating to financial situations is a root cause of stress and anxiety, that hinders a worker’s overall performance and productivity at work.
It was found that those who are dealing with financial stress are often absent from work. This could be due to needing time to handle personal financials, exhaustion, or stress-related illnesses.
When employees experiencing financial distress do decide to attend work, it can lead to presenteeism. This is when people attend work but don’t perform to their usual standards.
That is why we urge employers to prioritise their worker’s financial wellbeing.
What is financial wellbeing?
Feeling secure and in control of your finances is the goal for achieving financial wellbeing.
Employees knowing that they can pay their bills today, deal with any other unexpected expenses and are on the right track to a stable financial future, are all signs that they have good financial wellbeing.
Employers play the most obvious role in supporting financial wellbeing and can help prevent difficulties from occurring in the first place.
We advise employers to consider employees’ living arrangements or any other factors that may be impacting their financial situation when reviewing pay and always stay open to the conversations with them about any concerns.
However, we are aware that employers are not always able to offer higher wages to workers.
In this case, there are other things employers can do to help encourage workers to feel more confident when it comes to money matters.
How can employers help?
As mentioned, many people do not like talking about money, with there being a stigma surrounding issues like debt and mental wellbeing.
Building money conversations into the everyday conversation with employees will help build financial confidence and resilience to face whatever may be thrown their way.
This aims to improve physical, mental, and financial wellbeing for your employees.
The CIPD have produced a report that supports employers and encourages services such as financial education, debt counselling and general employee financial wellness programmes that can be used by employers and managers in the workplace.
HR teams or employers can also use different communication channels and sources to improve employee financial wellbeing.
Offering employees guidance on how they can take matters into their own hands and work on their financial situation can be extremely helpful and a more comfortable option for some.
Finally, developing a financial wellness programme is something we highly recommend. This ought to include the following areas:
- employee benefits that reduce living costs
- encouragement of employee control on their finances through hardship loans or earned salary access
- financial education that develops skills of attitude, judgements, and behaviour
- debt counselling for those who need it, or any other support
Need help executing a financial wellness programme? Let’s have a chat.