For many people January can prove to be a tough month from a financial point of view. It’s a long month, especially as many receive an earlier pay day in December, and people have often over spent during the Christmas period. Mounting debts can play very heavily on people’s minds, leading to stress, relationship problems, and mental and physical health issues. The impact of poor financial wellbeing on employee engagement and productivity can effect the overall performance of a company.
Financial instability
Over recent years we have seen numerous headlines about people in the UK struggling financially. From first-time buyers unable to get on to the property ladder, rising rents and travel costs, to parents having to support children for longer, and are therefore unable to save for their own retirement.
A significant proportion of the population, live from one pay day to the next, unable to save, and if an unexpected expenditure comes up it can bring them to the point of a financial meltdown. This isn’t just a problem for people on lower incomes, many middle class people are also experiencing these financial difficulties.
Low levels of financial education
A lack of financial understanding and planning and an over reliance on credit and not enough savings go some way to explain why so many face financial difficulties. People are not always taking the time to look at the financial risks they are taking and neither are they saving for a rainy day. With low levels of financial education and understanding, it is easy to see why people are more likely to undertake pay day loans with really high rates of interest, and other types of loans with higher fees and charges.
Financial wellbeing programmes
With many people uncomfortable to speak about money and their finances in general, it can be a hard subject to deal with. However, some larger corporations are proactively engaging with their employees, by having financial wellbeing programmes. They understand and recognise the importance for employees to improve their financial education, and are providing support for employees who are experiencing difficulties. Not only are these employees benefiting from this approach, the overall wellbeing of these organisations are too.
What can you do?
As a small to medium sized company there are some creative ways that you can help your people to become more aware about their financial wellbeing.
For example, you could start an awareness campaign via the intranet and other internal staff communications. Posters could be placed in break out areas or toilets, encouraging people to deal with financial issues and seek help and advice. This could range from savings, pensions to debt management. You can put them in contact with the relevant department and/or external parties such as Citizens Advice.
Ensure all your staff are aware of and can sign up to the stakeholder pension. They might find it difficult to have a reduced net income at first but they will adjust, and will feel the benefit in the long term.
You could organise a lunch and ask everyone to come with their top tip for saving money. Then feedback the tips via your internal communication processes. People would be more than happy to share their savvy buying advice from grocery shopping to sharing insurance tips.
Have you considered offering the following schemes to your employees?
- Childcare vouchers
- Cycle to work schemes
- Employee saving schemes.
There are many ways that you can support your people to becoming better with dealing with their financial matters. Employees would gain significantly if their workplaces did more to address financial wellbeing and in turn so would these businesses. If you would like advice on how you can support your employees then please contact us.