Supporting employees’ financial wellbeing should be a priority for employers all the time – however, during a cost of living crisis, it’s critical. According to recent research from Reward Gateway, 57% of UK employees say that the cost of living crisis is negatively impacting their work. This comes at a time when employers and employees are already wrestling with a burnout crisis, precipitated by the uncertainty and disruption of the past few years. Thirty-nine per cent of UK employees say the largest negative impact of the past few years has been on their wellbeing and over 2 in 5 frequently experience burnout. If employees’ financial wellbeing isn’t prioritised, organisations will see the impact on productivity and potentially employee turnover.
Currently, many employers are not sufficiently addressing those financial wellbeing needs, though they may think they are. Our research found that 82% of HR leaders in the UK say that they offer financial wellbeing support, but only 44% of UK employees say they have access to financial wellbeing support in their organisation. And only 28% of UK employees rate their employer’s financial wellbeing support as ‘good’ or ‘excellent’.
Traditional and alternative ways to improve financial wellbeing
So what does ‘good’ or ‘excellent’ support look like? The ideal way to support your workers and reduce financial stress is to offer pay rises, bonuses and promotions that increase their disposable income. However, many organisations may not be able to offer pay increases in line with inflation right now. In these instances, companies should look to alternative ways to support financial wellbeing.
For example, an employee discounts programme with offers at popular retailers is an immediate and cost-effective way to help reduce everyday costs and make employees’ salaries go further. On the Reward Gateway platform, we saw a 31% year-on-year increase in the usage of discounts programmes in 2022, with £7.1m in employee savings on groceries alone. Such a scheme is most easily managed through a digital employee engagement platform, which can also be used to offer rewards (like e-gift cards and retail vouchers) to meaningfully recognise employee achievements and milestones.
Offering a range of financial benefits is another great way to support financial wellbeing.
For example, salary sacrifice schemes (deducting costs from an employee’s salary before it’s taxed to save them money), travel loan benefits (that allows holidays to be paid off in instalments through net salary deductions to spread the cost), financial loans, salary advances and savings programmes. You can add additional value by providing access to financial resources and tools, such as free mortgage consultations and educational webinars, to help employees understand how to maximise their income. Again, these benefits can be best launched and managed through a digital engagement platform to bring everything into one place and make it as easily accessible as possible for employees.
Additionally, offering remote and hybrid working options is another way to champion financial wellbeing in the workforce. Being able to work from home helps employees save on commuting costs, childcare expenses and ‘office wear’ wardrobe spend which all quickly add up. The current childcare crisis in the UK – seeing some parents spend 80% of their pay on childcare – means that any support or reduction in childcare costs will have a huge positive impact on employees’ financial wellbeing.
As the cost of living crisis continues to drain employee incomes and increase stress, it’s time for employers to prioritise their financial wellbeing support to build stronger, more resilient and productive workforces.
To be attributed to: Nebel Crowhurst, CPO of Reward Gateway