Financial wellbeing tools: the HR manager’s guide

Companies have, for the most part, realised that mental wellbeing is essential to employee experience, retention, and productivity. But only a few have understood just how crucial financial wellbeing is to the whole picture. 

As a HR manager, you probably already have a good sense of where the people in your organisation are struggling. But many will be shy about disclosing challenges around their finances. And this can exacerbate the problem. Which is why it’s an especially important area to focus on.

 

Why financial wellbeing matters

In this uncertain climate, fear of the future has begun to hold a lot more sway over our stress levels. The challenges were already present before, whether we were planning for an expected future, like starting a family, or navigating unexpected turns, like becoming a single parent.  

Financial worries lie beneath many employee concerns. There might be a clear cause, such as a recent graduate’s worry that they won’t get on the housing market. Or it might be more subtle than that. The grind of month-to-month living, the overhanging sense that we are spending too much, the uncertainty of whether we’ll be able to survive if we miss a single month’s pay. 

It’s also a big issue for equality. Even with changing policies in relation to shared parental leave, women are more likely to take career breaks. This has a knock on effect. According to Close Brothers’ research, 42% of female employees don’t think they’ll ever be confident when it comes to savings and investments. 

Supporting financial wellbeing shows employees that we care. It helps them to feel supported to take time off when they need it and it enables them to be more productive when they’re at work. Greensill reports that employees who are worried about their finances are 7.6 times less likely to finish daily tasks and are twice as likely to leave the company. 

Financial wellbeing, then, is hardly an optional challenge but rather an essential problem for HR managers to solve. 

 

What are companies missing?

It’s becoming a trend to provide financial benefits to employees. Companies might offer loans or income streaming, which enables employees to unlock their pay before payday. But many of these perks, while welcome, just kick the real problem further down the road.

It’s common to have an Employee Assistance Programme (EAP) in place. But while these are a great lifeline for employees in dire need, engagement levels are incredibly low because employees don’t access it until they’re at breaking point. 

And reacting to need, while essential, is only one side of the coin. We also need to look at preventative measures, of which many companies are barely scratching the surface. 

 

The wellbeing gap

For many employees, there’s a great big hole where financial know-how should be. That’s not their fault. It’s just the way we’re brought up. School doesn’t teach us anything about our personal finances, nor do many of our families. As a result, employees are trying their best, but it’s usually down to them and the first results page of Google to get them through.

When we sent out our own surveys to employees at the companies we’ve supported, 41% said they sometimes don’t have money left at the month and another 13% said they always run out of money. We learned that 33% sometimes or always fail to pay off their credit card. 

If that wasn’t hand-to-mouth enough to make you nervous, we discovered that nearly a third of respondents didn’t have any emergency savings. 

While financial benefits can ease the problem, it’s financial education that actually answers it. And that’s what people are actually looking for: A PwC wellness survey reports that 88% of employees want a financial expert to tell them what to do, or help them make better decisions. 

But most companies aren’t answering the need. Only 11% of employees say that their employer has provided them with financial education in the past 12 months, according to a Close Brothers report.

So allow us to pull no punches and say this: if you think you’ve ticked the financial wellbeing box, 99% of the time, you haven’t.

 

What are the options?

There’s no doubt that employees have financial issues, but as an HR manager you might not always be best placed to help them directly yourself. For one thing, you don’t want employees springing a thousand and one queries about pensions your way, if you can help it. So it can help to bring others onside.

But this is a tricky act of balance. On the one hand, lunchtime seminars and online events can receive low engagement. While financial advice can quickly stray into pushing products that benefit an affiliated institution more than the individual employee.

At Bippit, this is a problem that we’re working to solve. We’ve found a way to match employees with financial experts who have no other incentive than to help them. Learn more about how our financial support system works or check out our free financial wellbeing guides to figure out what’s best for your organisation.