How to use financial wellness offerings to help your employees and improve employee retention

Support your people with their Financial Wellbeing

Cost of Living / Energy Crisis: Why this is important now

As HR leaders, you are back on the front lines, dealing with the outcomes of the rising cost of living, the energy price crisis in the UK, the new ‘quiet quitting‘ trend, the Great Resignation, and what’s now being dubbed the Great Exhaustion.

All of which are intrinsically linked to the fact that many people in the UK (and beyond) will face a real struggle come winter.

And we should expect all this to shift our people’s priorities when it comes to work.

What is clear is that businesses who are looking after their people and recognising the efforts they put in during this time are going to fare better than those that don’t.

We know that many companies want to offer cost of living payments, but how can you help your employees if wage increases or one-off payments aren’t possible?

Now more that ever, we need to listen to our people and really put ourselves in their shoes.

What are they struggling with? Is it wellbeing, financial support, work life balance, etc.? Take the time to ask, and then really listen to your people; they will feel heard and supported, and that will impact your culture and, in turn, your bottom line.

What is financial wellbeing?

Financial wellbeing is about having the financial freedom to make choices that allow you to enjoy life. It’s about being able to meet your financial obligations, being financially prepared for an unexpected event, able to save for future goals including retirement, and having the financial freedom to make choices that allow you to enjoy life – now, in the future, and under adverse circumstances.

Put simply, financial wellbeing is:

  • Meeting your everyday finances and managing debt responsibly
  • Understanding the things that make you happy and give a sense of purpose to your life
  • Being prepared for a the unexpected and being able to bounce back
  • Managing your one day finances to achieve medium and long-term goals
  • Protecting those that you leave behind

How does financial wellbeing impact employees?

People with poor financial wellbeing are generally less happy, which can result in unhealthy amounts of stress, serious depression, and mental health issues; and, in turn, lower levels of engagement and productivity at work.

By focusing on helping your employees improve their financial wellbeing you can simultaneously have a positive impact on their lives, raise general morale, and increase staff retention. Ultimately, promoting financial wellbeing in the workplace can make an organisation a better place to work and more profitable.

So, if financial wellbeing can improve happiness, productivity and lower the stress of your people, isn’t that something we should all be doing more to support?

How can organisations help their people with financial wellbeing? 

We asked this question of Charlie Goodman, who works in this area as Workplace Director for the Institute for Financial Wellbeing, as a Money Coach, and as a Partner at the Employee Benefits Collective.

He says, “It’s a broad area and there’s many players in this market at the moment. Personally, I’d say they are four sub categories of workplace financial wellbeing solutions:

  1. Financial products,
  2. Financial platforms,
  3. Financial education, and
  4. Financial coaching.

“Typically each solution majors or promotes itself in one category, but provides a level of support in the others.

“The key for me as an employer is to be clear on what you want the outcomes to be for the organisation and its employees, and what might work best for your budget and population, before picking providers and solutions.”

The four financial wellbeing solutions

Financial Products – Workplace Saving, Workplace Protection, Workplace Loans

Example Providers: Aegon, Aviva, Cushon, Legal & General, Scottish Widows, Smart Pension, Standard Life, Wagestream, Salary Finance, Hastee Pay, etc.

The new breed of financial wellbeing product solutions are typically lower cost loans paid through payroll deduction, that then have additional services bolted on to them to support the design of the product.

Typically they achieve lower interest rates as through an employer they have a large pool of potential clients and, by deducting their loan repayments as employees get paid via payroll, less risk of employees missing payments / defaulting.

Most of these solutions now recognise that simply getting people out of debt won’t necessarily stop them from getting back into it (in fact it’s highly likely, unfortunately), so they do have various education platforms delivered by people and technology to support the transition. These can be for “free” (although ultimately they are paid for in the loan charges).

Generally, they are reliant on employee numbers and low employee turnover, so they don’t always offer terms or favourable terms to every employer – i.e. their ideal clients are usually public sector.

I would think outside of what they offer how you can help employees overcome the mindsets and more practical realities of why they’re in debt in the first place.

Many of them will increasingly move into workplace savings as this market matures and, along with several of the pension providers, there are some standalone workplace savings products available, such as ISAs.

Workplace pensions should be included in your thinking when planning out your wellbeing strategy, particularly as many come with workplace savings features, free tools and materials for your employees, and access to generic financial wellbeing webinars.

Workplace protection, such as group life and income protection policies, should be promoted as providing employees with reassurance that, in the event of becoming sick or dying, there will be support for them and their dependents – this is important for providing piece of mind.

Again, many of these policies come with additional benefits, such as bereavement helplines, health support, and employee assistance programs, which can offer debt and legal guidance too.

Finally, Health Cash Plans are particularly helpful in meeting the costs of everyday medical expenses for employees and many don’t realise that most policies cover their children too.

Financial Platforms

Example Providers: Mintago, Maji, Nudge, Wealth Wizards, etc.

These are technology platforms that typically combine elements of open banking, various tools and calculators, knowledge articles, nudge notifications, and other elements of gamification to prompt people to engage with goals and learn more about their money.

In my experience, these platforms in the mid- to long-term, like a flexible benefits platform, need some human input and communication plans to ensure that people remain engaged with them past the initial excitement.

I think they have a bright future as the technology becomes more adaptive, particularly when workplace pension providers properly allow them to show employees real-time pension information – but that is probably a few years off. Where I’ve run these in the past, we’ve put in place a structured plan to have human touch-points to keep people engaged.

The cost has surprised a few organisations – again, I’d think of the pricing along the lines of flexible benefit platforms – and that can make it harder to get buy-in.

Typically, this can be overcome by setting up pensions salary sacrifice for organisations that don’t have it in place, and the saving from Employer National Insurance Contributions can be used to offset the cost.

Many of these platforms now offer access to coaches and financial advisers through the platform – these may cost the employer or the employee extra.

Financial Education – Webinars / Seminars / Workshops / Courses

Example Providers: Banks (HSBC, Barclays, Nationwide), charities (Money Charity, etc.), government (Money and Pensions Service), wealth managers (St James Place, True Potential, etc.), IFAs, pension providers, dedicated financial education providers (Better With Money, FinWell, etc.) and Employee Benefit Consultants.

Typically, employers have one-off sessions (such as cost of living) or sometimes go for a series of sessions (starting work, middle age MOT, preparing for retirement).

They focus on generic education and guidance around understanding concepts like investing, paying off debt, and retirement income choices.

Most will last an hour with time for questions at the end or varying levels of interactivity.

Many of the banks, wealth managers, and IFAs will offer these sessions for free, on the basis they hope for potential sales to the employee base.

Lots of pension providers offer generic free ones, so I’d look out for those, as well as the annual Pension Awareness Week run for free by the industry.

Financial Coaching

Example Providers: Bippit, Maji, Octopus MoneyCoach, Various Independents, IFAs, Employee Benefit Consultancies, etc.

This is a relatively new area in the UK and particularly in the workplace market.

Financial Coaching can deliver a range of things, from individual guidance on how things work, to digging deeper into the psychology and mindset of our relationship with money.

Mostly in the workplace, it is designed to provide 1-to-1 financial guidance (not advice) – usually tools to support the guidance given, helping people form habits – and someone to hold them accountable.

For instance, a coach may talk an employee through budgeting, working out which debts to pay off first, or how much to put in their ISA or pension.

They don’t (and shouldn’t) recommend products or investments or give tax advice, as these are areas for regulated financial advisers.

Typically, they also run some sort of financial platform too, and may offer group sessions.

A lot of their structure is built on a core benefit being offered and paid for by the employer, usually leveraging the allowance for salary sacrifice pension advice, and then options for the individual to buy additional sessions on their own.

Conclusion on what organisations can do to support employees: the ideal financial wellbeing mix

Charlie says his “ideal solution” is to provide a few sessions a year of general financial education, offering financial coaching with a financial platform, and then, if needed, consider the financial products available. Much of this will come down to budget (and buy-in from senior management).

The good thing about the platforms available is that they can also provide you with plenty of data for ROI exercises.

In the meantime, for free tips and support, point employees to Money Helper, the government website that has plenty of tools and information on all aspects of money. Contact your pension provider to see if they run generic free sessions – most of the big ones (like Aviva, Aegon, L&G, and Scottish Widows) do.

Also, Talk Money Week runs in November and that’s a great time to communicate areas that you are supporting and plan to help your people around their financial wellbeing.

Finally, for everyday saving tips, websites such as Martin Lewis’ Money Saving Expert and commentators such as Mrs Mummy Penny (Lynn Beattie) are good places to start.

About Charlie Goodman

Charlie Goodman is an International Employee Benefits and Employee Reward specialist. He is a Partner at the Employee Benefits Collective LLP and works with a mixture of SMEs and large multinational organisations. He has worked in financial services for over 15 years, for BDO, the Co-operative, Grant Thornton, and Mattioli Woods. 

He is a Director of the Institute for Financial Wellbeing leading their workplace wellbeing group, Secretary of the CIPD Central London branch co-founding their independent consultant group, and acting Events Chair of the NextGen Pensions diversity initiative, where he mentors too. He is a former Independent Financial Adviser and recently Certified Money Coach. He lives in Bromley with his wife Lizzie and their two dogs Millie and Peggy.

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