19th December 2016
Employee financial well-being has been one of the hot HR topics for a number of years. in 2017 an increasing number of organisations will prioritise the physical and mental well-being of their employees. An element of well-being strategy that been neglected however is Financial Well-being.
The Chartered Institute of Personnel and Development (CIPD) revealed some concerning statistics in research in 2016. Finances are highlighted as one of the three causes of employee stress, alongside work pressures and family/relationship problems.
Financial difficulties can not only impact an employee’s performance and productivity but if left unresolved can have implications on both mental and physical health. In the UK it is believed that over 17.5 million working hours a year are lost due to stress as a direct result of financial pressures.
There are many contributing factors to the growing concern for employees’ financial well-being. Many of us have very little in terms of savings; the CIPD estimates that this is typically less than a single month’s salary. Other factors include high housing costs, repayment of student loans and more simple matters such as inexperience in budgeting.
How can you help to ensure employee financial well-being?
- Operate an Open Door Policy
60% of employers now have an employee well-being strategy in place. It is important that financial well-being starts to play a part in this strategy going forward. An open door policy will make employees feel comfortable. You want employees to be confident they can approach someone in the event they require help and support, financial or otherwise. A recent BHSF Employee benefits survey November 2016 suggested that 45% of employees feel unable to approach their employer with debt issues that affected their normal day to day work.
- Employees who Appear Stressed or Distracted
Management training also plays an important part in operating an effective employee well-being strategy. Managers and supervisors should be trained to recognise the early warning signs. Being able to observe stress and/or mental health issues helps stop them spiraling out of control. Employees who appear to be stressed, distracted or generally acting out of character should be approached in a friendly and supportive way. Similarly, those employees taking more time off sick than normal should be interviewed on their return to work to find out the reason behind the absence.
- Find out the Needs of your Workforce
Plan and implement a financial element within your overall well-being policy. You will need to consider the needs of your workforce carefully. Run staff surveys and/or focus group sessions.
- Provide Financial Education
The most common employer provision for financial well-being tends to be financial education. A survey conducted by Close Brothers Asset Management suggests that around 29% of businesses now offer some type of financial education. This could be in the form of seminars, online resources and webinars to employees. These sessions typically include information on topics such as budgeting, understanding debt, the importance of savings, investment options, debit and credit, understanding APR rates and payday loans. However it is important to make clear to employees that any decisions made need to be their own rather than that of the company.
- Consider Offering Hardship Loans
In the unfortunate event that one of your employees is affected by an unexpected personal crisis, you may wish to consider offering a hardship loan or an advance on salary on a discretionary basis. This type of employee benefit can make all the difference to an employee in overcoming a period of financial worry and strain.
- Offer Help with Savings and Benefits
Consider additional employee benefits that promote savings or financial assistance to your employees. You may wish to consider workplace ISAs or employee share schemes. Other benefits include childcare vouchers or tax efficient salary sacrifice schemes.
- Listen to Requests for Additional Help
Most importantly, be prepared to listen to requests for additional help from your staff. In some cases, employees may require individual support or even counselling whether their problems are caused by financial issues or wider issues. There will never be a one size fits all solution, so it is imperative that each individual problem is dealt with in a sympathetic and helpful manner.
How can HR Software Help?
HR is becoming an increasingly critical business function in terms of contributing to bottom line strategies. It has never been more important to implement effective HR systems to assist overstretched HR teams. Developing an employee well-being strategy that fits the needs of your employees takes time. Having an effective HR system in place such as our device independent browser based solution, Amity can help. Our software removes the administrative burden which often stands in the way of HR achieving their strategic function. The ability to record and analyse absence, the reasons for absence and the results of return-to-work interviews are just some of the functionality you can expect.