Why are financial benefits so critical to employee experience?

5 min read

In a report that was published just four years ago, Barclays referred to financial wellbeing as “the last taboo in the workplace” – the one area that HR professionals were still afraid to delve into when it came to their reward and benefits offerings.

But recently, we’ve seen a change in the HR world when it comes to financial benefits. It’s become clear that today’s workforce values an organisation that prioritises the financial health of its staff. In fact, according to the Barclays report:

• 38% of employees said that they would move to a company which put financial well-being as a priority.
• Almost 80% of employees are not satisfied with the efforts of their employer when it comes to managing their finances.

If you’re not already considering financial benefits in your overall reward scheme, it’s time to pay attention and starting doing something about it.

What’s in it for us?

In the past, a common misconception among employers was that we don’t bear any responsibility when it comes to employees’ financial wellbeing – surely that’s what banks are for? Plus, I’ve found that many companies are afraid to offer anything money-related, such as financial education or employee loans, because they’re worried that if things go wrong, it will reflect badly on them.

It’s important to break through these barriers and recognise the benefits to a company of a financially healthy workforce.

If a member of staff is going through financial difficulties, it’s inconceivable that they’re not bringing their worries into work with them, that it’s not affecting their levels of concentration. According to a Willis Towers Watson’s 2017/2018 Global Benefits Attitudes Survey, the effect in the workplace is real.  Employees troubled by their finances are twice as likely to be in poor health, report considerably higher stress levels, more absences, and significantly lower levels of workplace engagement. Ultimately, all of these factors put a drain on our employees and on our businesses. In fact, according to the Barclays report, it impacts the bottom line by 4% as a result of the effect on work of employees worrying about their finances.

The role of employers to provide financial benefits

Employees go through a lot of different stages throughout their working life, all of which bring unique financial hurdles – marriage, children, buying a house and university fees, to name just a few. The question for organisations is: what can we do for employees who are struggling with money at each stage? How can we help them to move into a more comfortable position?

There are a number of financial employee wellbeing benefits you can put in place to help your employees:

• Your company’s EAP (employee assistance programme) isn’t just there to help with the crisis points in someone’s life, as lots of people think. The programme deals with everyday issues, too – financial wellbeing being one of them. If an employee is struggling with money or has questions on how to manage their money better, it may be a good idea to encourage them to use the EAP to get some help.

• According to the Barclays report, 1 in 5 employees said they would value broader financial guidance, debt management and counselling if they were in financial hardship. Companies could consider offering financial education programmes to address these needs and provide employees with tools to effectively manage their finances.

• During periods of an employee’s life when they need to borrow a large amount of money, or are in a lot of debt, employee loans with salary-deducted repayments may be invaluable. Companies like Neyber and Salary Finance offer affordable lending.

• An employee discounts scheme lets employers stretch their employees’ disposable income in tangible ways, offering generous discounts or cashback at a variety of retailers to help ease financial burdens of everyday grocery shopping, holiday planning or around Christmas when buying presents can be a worry.

• Salary sacrifice schemes are another way to help employees stretch their income through tax savings. Although there’s been significant changes around salary sacrifice in the past year, they still represent opportunities for significant savings.

A company who has been innovative in meeting the financial needs of their mostly millennial workforce has been Goodman Masson, a financial recruitment business, which I interviewed for my book
“Build it: The Rebel Playbook for Employee Engagement.”

The organisation put in place “Benefits Boutique,” a varied and unique offering which includes a mortgage fund and a loan programme which includes a student loan, a home improvement loan, a new-parent loan and even an exotic holiday loan.

According to Andrew Michael, Managing Director,

The overarching aim is finding ways to take the financial strain and pressure off the shoulders of our employees, supporting them in leading more productive and rewarding lives both in and out of the workplace.

Keep in mind that when you’re choosing an appropriate set of financial wellbeing benefits for your organisation, it’s important to collect employee data and understand your workforce – this will show you the areas in which you need to focus the most effort. For example, what percentage of your workforce are in debt? What percentage own a home? What percentage earn under – or over – a certain amount per year?

This way, you’ll be able to decide on the right range of products – for some companies, employee loans or increased emphasis on an EAP may be most appropriate; for others, it may be about implementing a saving scheme. There is no one-size-fits-all approach – as with all employee benefits, it’s about deciding what suits your company and your people best.

What kind of benefits have you introduced to your organisation? I’d love to hear ideas in the comments!