Four Tips to Improve Financial Wellbeing in the Workplace

By James Herbert, CEO and Founder of Hastee

Since the coronavirus outbreak, when it comes to managing personal finances the rulebook has been completely rewritten. As many have seen their savings diminish and their main sources of income drastically change or vanish altogether, financial planning has become more difficult; despite furlough schemes and the credit card, loan and overdraft payment holiday extension, many are still struggling to make ends meet. In fact, Hastee’s 2020 Workplace Wellbeing Study found that 41% of UK workers surveyed are now relying on at least one new loan, credit card or overdraft. Additionally, 59% of these people applying for high-cost credit are doing so despite knowing they would struggle with repayments.

Now more than ever, everyone can benefit from solutions that give them more control over their finances. So with this in mind, what can businesses do to support employees through new challenges presented by the pandemic?

1. Consider adding new value to your benefits package 

Employee benefits should go beyond offering gym memberships and extra annual leave; while physical and mental wellbeing packages are important, employers should also address what is causing the majority of workers’ stress: money. Our Workplace Wellbeing Study revealed less than one in five businesses offer a financial wellbeing programme. Money is something that affects people’s professional and personal lives and, as employers, you can have a direct impact on your workers’ financial wellbeing, so why not improve it?

A financial wellbeing programme can come in many shapes and sizes, offering advice or even a complete positive overhaul of how staff can be paid. And the benefits of such can not only aid the employer but the employee, improving productivity and retention and reducing presenteeism.

2. Enable a conversation

Talking about finances can be uncomfortable for both parties. In fact, 1 in 5 women would rather discuss their dating history than their financial investment(!) and our latest research revealed nearly half (48%) of workers feel uncomfortable having a face-to-face financial conversation with their employer.

It has been said that ‘knowing is half the battle’, but when it comes to supporting your staff regarding their finances, it could be a good deal more. Rolling out a new employee financial health platform can often provide a catalyst for more open (but private) conversations to understand workers’ personal financial hurdles – allowing the business to offer greater support.

Additionally, organisations need to take into account today’s modern worker: enabling other methods of communication, education and management of wages – such as apps and digital software – is a fresh and more approachable alternative for many wanting access to their wages early but not wanting to air this with their boss.

3. Present alternatives: create good money management behaviours 

As an employer, you’re directly impacting your workers’ financial health. For most, your payments will be their main source of income. In today’s climate, the sense of uncertainty looms over us all and workers are more worried about their job security and ensuring they have a regular income. To account for this, people have shifted their spending habits and are seeking financial help to get through the month.

People tend to turn to high-cost credit, bank loans, savings, ‘the bank of mum and dad’ and other risky alternatives when they foresee or experience a cash shortfall. Doing this can have significant knock-on effects that go well beyond poor work performance and absenteeism.

Providing a learning portal or external, confidential, expert advice for personal finances for staff can showcase alternative approaches that foster positive spending and borrowing habits. It’s quite alarming how little armed we come out of the British education system when it comes to our finances. If businesses can do their part in educating and supporting staff it can make all the difference to their success and happiness – both inside and outside work.

4. Break the status quo 

There is another option that has only recently become available to today’s workers. ‘Earnings on Demand’ is an evolution of the way employees interact with their wages. While as a concept it is little-known now, with many challenger banks running a version of it already, 2021 is expected to see a huge uptake of this offering. Some allow access to salary a day or two in advance of payday, but the real leaders allow access to earnings after each shift or when a day’s work is completed – not at the end of the month. By empowering employees with these alternatives, allowing them to plan ahead and govern their finances with more autonomy, financial liquidity is within reach.

Research consistently shows that traditional, fixed monthly pay cycles are not fit for purpose and don’t improve financial stability; instead, it’s led individuals to turn to high-cost credit options. In contrast to high-interest loans, it isn’t a short term fix with long-term consequences, but simply makes wages that have been earned available when needed. As uncertainties continue as a result of the pandemic, financial mastery will become all-the-more important, making now a better time than any to act and support staff.