New research conducted by the CIPD has shown that half of employers do not have a financial wellbeing policy, despite the financial hardships brought about by the pandemic.
Research by the Chartered Institute of Personnel and Development has shown that a significant proportion of employers (49 per cent) do not currently have a financial wellbeing policy.
Prior to the pandemic, less than three in 10 employers had a financial wellbeing policy in place (29 per cent), suggesting this was not prioritised as an important part of employee wellbeing.
However, statistics by the ONS have shown the impact of COVID-19 in relation to finances and savings. In December 2020, it had been reported that over nine million people had increased their borrowing since the start of the pandemic.
Additionally, the ONS reported that there was a “widening financial gap” between households, outlining that the hardest hit were those on low pay, young people and parents of dependent children.
As such, more employers are being mindful of financial wellbeing and what this could mean for employees.
12 per cent of employers have introduced or plan to introduce a a financial wellbeing policy in direct response to the pandemic.
In addition to this, almost a fifth (19 per cent) said they are planning or considering becoming an accredited Living Wage Foundation employer. These employers pledge to pay employees a minimum of £9.50 across the UK or £10.85 in London to people aged 18 or over, calculating the wage that people need to live.
A quarter of employers (24 per cent) have explored how the pandemic has impacted their employees’ financial wellbeing, in order to identify the correct support to provide. A further fifth (18 per cent) plan to do so by the end of this month (March 2021).
Benefits and reward have also been considered, with just under a third (30 per cent) evaluating how fair the current reward system is.
A financial wellbeing policy is one that recognises the central role that employers play in workers’ financial wellbeing. The CIPD states that this could be as simple as a commitment to signposting to independent money and debt guidance, offering access to low-interest loans and running pension workshops.
However, there are key barriers which are currently preventing businesses from implementing financial wellbeing measures to assist their staff.
Almost half (49 per cent) reported that senior management do not see it as a priority right now. Just over a quarter of employers (27 per cent) said that senior management do see the need for a financial wellbeing policy, but do not have the time, money or expertise to create it.
The CIPD suggested that a financial wellbeing policy should include:
- Signposting to financial wellbeing advice
- Targeted financial education support at key moments in working lives e.g. maternity leave
- Revising benefits packages to include finance-friendly initiatives e.g. giving employees the option to choose how often they’re paid
- Implementing flexible working policies to help employees with caring responsibilities
- Giving people security over their hours and helping them to progress into higher-paid roles
- Committing, where possible, to paying all employees at least the Real Living Wage.
Whilst we fully acknowledge how tough it is for businesses right now, with many just focusing on surviving, we think there’s a strong case for employers to be doing more to support their people’s financial wellbeing. It may well be that even light-touch steps, such as signposting to independent money and debt advice, can start to make a difference.It should also be said that every employee stands to benefit from having better access to financial wellbeing support, particularly at key life stages, such as when they are starting out, becoming a parent or retiring.
*To obtain these results, the CIPD surveyed 420 employers.
Monica Sharma is an English Literature graduate from the University of Warwick. As Editor for HRreview, her particular interests in HR include issues concerning diversity, employment law and wellbeing in the workplace. Alongside this, she has written for student publications in both England and Canada. Monica has also presented her academic work concerning the relationship between legal systems, sexual harassment and racism at a university conference at the University of Western Ontario, Canada.
