Inflation has once again broken into double figures. Energy costs remain at record highs. Interest rates continue to be hiked. The cost-of-living crisis has led to the biggest drop in living standards since the 1950s. Make no mistake, the combination of these economic factors will be having a devastating effect on many employees’ financial wellbeing. This is underlined by Mintago’s research, which recently revealed that employees have expressed more financial concerns this year than normal, according to 66 percent of 762 UK business managers, highlights Chieu Cao.
Not only can negative financial wellbeing lead to poor mental health and elevated levels of stress, but it can also be bad for business, as it can impact employees’ productivity.
To back this up, 36 percent of millennials say that their job performance is negatively impacted by stress caused by their financial troubles, according to Mintago’s research. Clearly, employers need to act. Therefore, many employers will be considering ways in which they can help their staff navigate the cost-of-living crisis and protect their financial wellbeing.
However, offering support for employees’ financial wellbeing must be approached in the right way. When the economic climate is as turbulent as it is, simply providing broad-brush financial advice or circulating general money-saving tips is not enough. Instead, employers need to provide personalised support that’s unique and relevant to each individual within the workforce, thus avoiding a one size fits all approach.
Assume nothing
Firstly, it’s vital that employers don’t provide support that is based on rudimentary ‘life stages’ or age. While life choices and financial ambitions do often correlate with age, not every employee is the same, so employers have to avoid assumptions when providing financial wellbeing support.
Customising support
One way of avoiding assumptions, and to begin constructing an effective strategy to encourage positive financial wellbeing, is to get to grips with individual employees’ financial needs, goals and situations. By engaging in a one-on-one meeting with each employee, or asking them to carry out an online quiz, employers can better understand the unique circumstances of each member of staff.
With this information, employers would be able to ensure their staff get the support that is most relevant to them. For example, if an employee is nearing retirement, they could receive useful information about planning for their future. Without gathering this kind of information, employers risk increasing the financial stress of their employees. For instance, if an employee is worried about paying their energy bills, an educational pamphlet about putting down a deposit on a new house is hardly going to be helpful.
As a result, their financial wellbeing might take more of a hit, which is why employers need to ensure that their support fits in with their employee’s immediate financial situation.
Increasing financial knowledge
Another use of one-on-one meetings or online quizzes is to identify any financial knowledge or literacy gaps. Unfortunately, not enough attention is paid to financial education at school, so employees would welcome extra support from their employers to increase their knowledge about their financial lives. By bridging these knowledge gaps, employers can help their staff to take make better-informed decisions about their finances, which can help them maintain their financial wellbeing in the long run.
Using online wellbeing platforms to provide support
A simple way of encouraging staff to take control of their finances is to provide them with a financial wellbeing platform – like Mintago. These platforms give employees all the tools they need to keep track of their long-term financial goals, while simultaneously giving them the information they need to overcome short-term difficulties, like the cost-of-living crisis, which could have impactful long-term effects.
Alongside educational materials and savings targets, staff can also access pension tracing services. These platforms give employees a dashboard with which they can view their savings, investments and current accounts simultaneously, giving them a complete view of their financial situation. This will allow them to make better-informed decisions about their money, which should translate to improved financial wellbeing.
Moreover, these platforms can connect employees with financial advisers who can help them navigate any difficulties that they are facing in their financial lives. By allowing them to talk about more specific financial difficulties than with a one size fits all approach, these resources would also help to personalise the financial wellbeing support offered to employees.
In conclusion, businesses must take all reasonable steps to ensure that their employees continue to enjoy positive financial wellbeing in an economic climate where doing so is challenging. Indeed, personalised support will achieve this more successfully than a one size fits all approach.
Chieu Cao is CEO of Mintago. Mintago is the UK’s most complete, inclusive and unbiased financial wellbeing solution, helping businesses adapt and support their employees in these changing economic conditions. Mintago is FCA regulated and helps employees find lost pension pots with ease, providing financial planning tools, access to free financial advisers and over 1,000 pieces of educational content. Mintago also helps businesses and employees save money via the HMRC salary sacrifice pension scheme. It provides a hassle-free implementation programme, creating direct savings on National Insurance.
