Employee financial wellness programmes: how do they support recruitment and retention?

This article is taken from the latest issue of Relocate magazine.
– the must read for HR, global managers and relocation professionals.Insecurity at work, money worries, the effects of austerity, the cost of student loans, the prohibitive cost of renting and buying in many of our major cities, and the responsibility of looking after dependants such as elderly relatives and children, can all take their toll on employees.

Financial worry and stress and its impact on employee performance

Financial worries are a major source of stress. This can impact their performance at work, and lead to absence, sickness and poor performance. On the other hand, employers can support staff with education around financial wellness and stress reduction. This can also be a way of recruiting and retaining talent and creating a healthier work environment.A number of reports have highlighted how stress and worry can affect the morale and performance of employees. The Money and Mental Health Policy Institute’s recent research found that 2.3 million people in the UK are experiencing mental health problems that affect the amount of paid work they do. Zurich’s Cost of Resilience report  found that more than eight in ten (84%) people questioned said they wake up at night worrying about their finances, with a fifth (19%) waking up more than once a week.While health and relationship issues were the biggest concerns, money worries, including being unable to pay bills, debts, and job insecurity were also high on the list.A survey of 1,000 SME workers by financial advisers Drewberry found some more than 1 in 3 workers had taken time off in the past 12 months to deal with stress or a mental health problem. The youngest workers were also those most worried about money and feeling stressed at work. One third of those questioned said benefits and perks were a key attraction when looking for a new employer.

Programmes to help employee wellness and financial wellbeing at work

So how can employers help their staff, particularly those in organisations where staff are most likely to be millennials, struggling with money issues?James Lloyd-Townshend is CEO of Nelson Frank, a niche technology recruiter. The company actively encourages employee wellness through its Frank Wellbeing and CSR programmes.“People are your biggest asset, so nurturing the physical and emotional wellbeing of employees should be one of your top priorities,” he says.“Reports indicate that health and financial worries top the list of employee concerns, and if your staff are facing issues, you’ll need to have the capacity to alleviate any concerns they have.”Steven Cameron, Aegon Pensions Director, says employers need a shift in mindset, with financial wellbeing viewed as the equal of traditional physical and mental wellbeing, not the poor sibling.

Employers should provide financial education to their employees

“Broadening access to financial education and providing the tools that enable employees to plan and manage their finances is key to providing an environment of support,” he says.One of the primary ways that businesses can help their employees to manage their finances is through the provision of financial education.“Our evidence suggests employees who have access to financial education and clear information on the benefits open to them through their workplace have stronger financial wellbeing than those who don’t.”

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What do financial wellness programmes provide?

Financial wellness programmes can encompass workshops on budgeting and personal finance, pensions education, savings and credit, and finding ways to cut household bills. By offering this education within the workplace, employers can potentially benefit from higher levels of employee engagement, and retention.“For many workers, financial worries directly impact their ability to be productive at work,” says Steven Cameron. “Money concerns can cause stress and disruption, leading to individuals being distracted whilst carrying out tasks or taking days off due to financial stress. Financial education is a simple and effective way of improving this.”

HR professionals: offering access to financial advice is a business advantage

Aegon’s research suggests that almost half of HR professionals support offering access to financial advice because it would make their business more competitive when it comes to attracting new talent and retaining existing staff.“Whilst young workers may be concerned about saving up for a house deposit, older workers will be concerned about providing for their children or their retirement,” he says. “Employers who tailor their approach to each age group will see the best results.”

Financial and mental wellness help for expatriate staff overseas

CABA is the charity which works with members of the Institute of Chartered Accountants in England and Wales both in the UK and internationally to help them manage and maintain their wellbeing – in both a personal and professional capacity.Kelly Feehan, Service Director, CABA, says wellbeing affects all aspects of a person’s life and covers a range of pressures, including financial, physical and mental health.An important part of wellbeing is financial security, which is different depending on whether employees are based in the UK or abroad.“Financial wellbeing is less of a concern for those abroad, with just 15% saying they feel financially insecure,” she says. “For UK members, this insecurity level is 27%. A common benefit of working abroad is excellent levels of pay, and this is certainly reflected in the trends we see from members based abroad versus the UK.”However, it’s important to remember that financial wellbeing will impact how well an employee does their job. Feeling financially insecure causes great stress and anxiety, which for those abroad could prevent them settling and lead to a failed assignment. “We are seeing an increasing trend of employers taking a more proactive stance on financial wellbeing and this is good to see. Providing team members with educational resources helps not only to possibly prevent any fiscal mishaps down the line, but it engages them with the company too, and highlights a duty of care.”

Helping employees manage their money better

As well as financial workshops and personal financial education, there are a number of new initiatives that support employers in helping their employees with monthly cashflow issues.

Flexiwage, payroll software that allows employees to determine when and how frequently they are paid

Flexiwage, is a payroll software tool that employers can use to help employees manage how and when they are paid. Anthony Cronin, CEO, says the product is particularly aimed at the 18 to 35 age group.“We have two products – employee financial training and software for enabling employees to access their pay weekly or fortnightly rather than being paid at the end of each month,” he says.“We saw that as companies moved from weekly and fortnightly pay to monthly cycles, younger members of staff were struggling to make their pay last. Retentions rate were dropping and employees would start to go off sick or absent in the third week after being paid. People were finding it difficult to manage their money and it was affecting their attendance and performance at work.”The software allows employees to determine their own pay frequency. So for example, instead of taking the full amount of pay, they can take 50% to cover two weeks, and then the remainder for the last half of the month, without the cost to employer of having to make 52 payrolls in a year.The company also provides financial education, either by training HR staff or delivering it directly. “It’s about basic budgeting. Many employees are in debt – and have credit cards and loans. Millennials have grown up in a society where money is freely available, and they can access cash even when they haven’t earned it.”

Neyber, a financial wellbeing education hub

Another offering is Neyber, a programme of financial wellbeing which includes an online education hub with articles, podcasts and tools to help employees build their financial knowledge.“We also provide a range of education through other mediums including online webinars,” says Heidi Allan, head of employee wellbeing at Neyber. “More than half (55%) of employees we surveyed would like help and support in respect of their financial health (this rises to more than 7 in 10 for those aged under 34).”For those that need help to take control of their regular or future finances, Neyber offers loans and savings products through salary deduction.“We are finding that a lot of organisations are now looking at financial health as part of their strategic agenda which is really encouraging,” she says. “Having an engaged and productive workforce is business critical regardless of industry.”For some industries however, this can also be crucial for health and safety - those who drive or operate machinery, physical roles, emergency services and those who deal with client money to name a few. A lack of concentration at work can have serious consequences for individuals and the wider community.

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