How to create a workplace financial well-being strategy

A lack of financial well-being can reduce your employees' quality of life, either because the cost-of-living crisis is making it difficult to make ends meet or because they're facing more serious issues, such as homelessness or significant debt. Money worries can lead to depression and other mental health issues, and difficulty concentrating, which can reduce productivity. Some employees may also become more irritable, which can damage relationships with their colleagues.

Stress and depression can also lead to physical illness and increased absenteeism. As you can see, poor financial well-being could negatively impact your employees and your business.

A robust financial well-being strategy needs solid foundations and a healthy company culture. When developing your strategy and investing in the right support, ensure your leadership team are on board by setting out the business case for any changes.

Here are a few ways to ensure you develop your strategy along the right lines.

Normalise talking about money

Financial well-being can be a sensitive subject, particularly if an employee is struggling. They may be embarrassed to admit they're facing challenges and ask for help, which can pose challenges for colleagues and line managers who want to offer support.

A financial education programme can help to normalise discussing finances. It's also a good idea to train line managers to identify signs of financial distress and open conversations with employees.

Understand your employees’ needs

An effective strategy reflects your employees’ needs. Using various methods to assess your team’s financial well-being provides a comprehensive view and supports an effective strategy. As we've mentioned, identifying employees who may be struggling financially is a good starting point.

It's also wise to consider workforce demographics to identify potential sources of financial stress, such as employees on reduced hours or low wages, those paying for childcare or nearing retirement. An anonymised survey lets employees share personal information in confidence when they may not be willing to discuss it with you.

Review existing benefits

Once you've considered employee needs, review the employee benefits and services you already provide to identify any gaps and consider introducing new benefits. You may also discover that some benefits that already provide support are currently underused. Third-party providers, such as your health insurer, can provide the data. In those circumstances, better communication may be needed.

Determine desired outcomes

Improving employees' financial well-being requires a diverse strategy that caters to their differing needs. Before making changes, consider what success looks like. What metrics can you set to determine whether your strategy is driving improvement? Setting these now lets you set a benchmark and review progress later. For example, you might measure employee engagement, aim to reduce sick days, or promote greater employee investment in their workplace pensions.

In practical terms, many employees' financial well-being would improve if they earned more. Offering a living wage, pay increases, and bonuses should always be the aim. Initiatives that support career progression, such as placements in other departments, work shadowing and funded training, help employees to fulfil their potential.

There are several ways to help your team through the cost-of-living crisis, including direct financial support and other resources.

Financial education and resources

High-quality financial education helps your workforce identify ways to save money and make informed decisions about their finances. Workplace training sessions covering financial topics such as budgeting, investing, managing debt, and common financial scams can be helpful and create a culture where staff feel more comfortable talking about money.

Money worries can be a sensitive subject, so it's also a good idea to provide access to resources staff can consult based on their interests. You can host these on your company intranet, along with links to organisations and charities providing financial well-being support.

Enhanced sick pay

A prolonged absence from work due to illness or injury can cause financial stress, as a drop in income can mean employees struggle to pay their bills and fall into debt. Statutory sick pay is available for up to 28 weeks of absence, but it is likely much lower than your employees' usual salary. You can provide enhanced sick pay by investing in group income protection insurance, which covers a percentage of an employee's salary for up to 2 years and provides a valuable financial safety net during a worrying time.

Death in service benefits

Death-in-service benefits pay a lump sum to an employee's family if they die while employed by you. While this doesn't directly benefit the employee, it helps alleviate any financial concerns for their loved ones after they're gone. You can provide death-in-service benefits by buying group life insurance as part of a comprehensive support package.

Help with living costs

Salary sacrifice schemes and other financial assistance can help your workforce save money on the things they already buy. For example, salary sacrifice schemes can lower the cost of childcare, or help staff buy a new bicycle or electric vehicle. Always speak to your accountant and ensure staff can access one-to-one guidance before joining a scheme.

Season ticket loans can also offer savings for employees using public transport. Annual or monthly tickets are often cheaper per journey than single tickets. Loans help with budgeting by letting staff pay upfront and spread the cost.

Pension contribution matching

Pension contribution matching can improve an employee's financial situation as they approach retirement. You agree to match an employee's payment into their workplace pension up to a specified percentage, thereby boosting their savings. It's also a good idea to provide financial literacy training to help staff with their retirement planning and decide how to manage their pension savings.

Provide health insurance

Health insurance is a valued employee benefit as it provides quick access to medical care and a range of other support services. It can shorten an employee's absence from work and provide support for mental health and well-being.

However, it also provides services that can help your staff save money and gain insights to manage their finances better. Access and the benefits on offer vary depending on your chosen provider.

Member discount schemes

Most insurance providers offer member discount schemes for their life and health insurance customers. These offer a range of discounts on products and services, including essential purchases such as groceries, as well as treats like holidays, spa days, and cinema tickets. Some schemes provide the same discounts to all members, while others let employees earn enhanced rewards when they set and achieve healthy living goals.

Employee Assistance Programmes

An Employee Assistance Programme (EAP) provides employees with access to 8-10 counselling sessions to support their mental health. They also operate telephone helplines offering financial and legal guidance to help people understand their rights and develop their financial skills. They can also signpost staff to one-to-one guidance or other resources as needed.

Some insurers include an EAP with their business health insurance as standard, while others offer it as an optional extra.

Clear communication plays a key part in ensuring your financial well-being strategy achieves its aims. It promotes buy-in from key stakeholders and ensures employees understand the importance of financial well-being and the benefits and resources you've provided.

Outlining the full strategy, benefits and resources in one go will likely cause overwhelm and a lack of understanding, so it's a good idea to introduce information gradually. A varied communication strategy, including training sessions, emails, and visual assets, works well. Also consider targeted campaigns based on staff demographics or significant life events, such as starting a family or approaching retirement.

Reviewing your strategy regularly helps you assess whether it's been a success and adjust your approach if needed. Review the metrics you set at the start of the process to monitor improvement. Checking in with your team to see whether the strategy has had positive effects on their mental health or whether they face new financial challenges also helps you adjust your approach if necessary.

Choosing the right insurance policies to deliver high-quality employee benefits helps you support your team’s financial well-being in a cost-effective way. Contact us for tailored advice.