Employers provide a wide range of employee benefits to a wide demographic population. The challenge is how to understand how valuable they are to your staff. Companies need to consider the needs and wants of their employee population to identify financial supports relevant to them. Is there a corresponding benefit, or is there a gap?
A successful financial wellness strategy provides a bridge between a fully paternalistic approach and more individualised solutions.
The focus of financial wellness should be to enable employees to make better financial choices. It is about helping employees make those decisions, not about doing it for them.
Financial wellness is about enabling your employees to take incremental steps towards adopting better financial behaviours.
It is about bringing an individual to a peaceful state around their finances. They should be comfortable that they are living within their means, meeting their goals and thinking about their future finances with confidence.
It shouldn’t be assumed that employees automatically know or understand the full range of benefits that an employer offers. How financial wellness benefits are communicated to staff can directly impact how they engage with and use them. While long-term savings and planning are crucial, it is important to remember that there are many short-term goals employees may need help with. These can include budgeting, managing debt and emergency savings.
Wellness is completely individual. What it is for one employee will not be identical for their colleagues. Education supports a financial wellness programme, but it must be delivered based on individual needs. It must motivate, enable and reward actions and provide support. Employees should be supported to develop a clear understanding of how to utilise and maximise their employer-provided benefits as part of their overall financial plan.
Many employers are recognising that poor financial wellbeing can have a detrimental impact on mental health. Money and mental health research in the UK shows that two-thirds of employees who are finding things financially difficult report at least one sign of poor mental health.
Employees feeling stressed about their finances are much more likely to be distracted at work. Employees are less productive which has a direct impact on costs for employers.
A financial wellness programme should provide a life stage and needs based approach. Financial wellness is about helping employees to adopt better financial behaviours which will help them deal with financial events as they arise.
Employees are being asked more and more to make their own financial decisions, but they want someone to validate and inform that decision. More and more employees want help around understanding and using their employer benefits to help their finances.
The challenge of defining the ‘employee proposition’ is being experienced by lots of large organisations. Employers are providing a wide range of employee benefits. The challenge is understanding if they are valued or even understood. Remote working models can add to this complexity.
A strategic approach is needed to deliver the most effective results. Simply bringing in an adviser to talk to your staff around a financial product or financial proposition will tick a box, but is unlikely to achieve success in the long run.
A much better approach is to set clear targets for your financial wellbeing programme based on an understanding of the needs of your staff and then work methodically to meet those targets. Such an approach is far more likely to support your employees’ financial wellbeing in the long term.
It’s key to get the views of your employees and adapt as your workforce evolves. The world has turned upside down over the past 12 months, and what employees value has changed as a result - making this a really useful time to review how resources for employee benefit programmes are being allocated.
Assess the value of your current employee benefit programmes. What elements are used, where is participation less complete and what gaps might exist? Consider whether it is appropriate to analyse based on employee demographics, including age and salary level.
Seek to understand the financial wellbeing challenges faced by your employees to inform your financial wellbeing strategy. A financial wellness programme should ideally provide a life stage and needs based approach.
Given the range of support offered by employers, there are many elements that contribute to employees’ overall financial wellness. It is helpful for an employer to understand the messages being delivered across providers, to ensure that employee needs are being addressed and that there is a consistent thread running through the different communications.
There is a clear benefit from reshaping financial wellbeing support with a focus around your employees. In simple terms, this involves understanding where your employees are starting from, understanding where your employees are trying to get to and understanding the next steps.
Financial wellbeing can be thought of as a framework to bring structure and focus to current financial support that an employer offers.
As the future of work continues to develop, so too will the needs of your employees. We will work with you to design and deliver a tailored financial wellbeing programme.
It will educate and inform your employees about their rewards and benefits in the context of their personal financial objectives.
Our goal is to empower your employees to make educated decisions which will improve their financial wellbeing.
We will work with you to create a programme that will motivate employees, drive sustainable behaviour change and promote a culture of financial wellbeing. Contact us today.
Director, PwC Ireland (Republic of)
Tel: +353 1 792 6171
Olivia M Kelly
Senior Manager, PwC Ireland (Republic of)
Tel: +353 1 792 6891