Is it down to you to help with your employees’ financial wellbeing? Obviously it’s not something you can be responsible for but as part of supporting overall wellbeing it’s certainly something to consider.
Evidence is growing about how employees’ money worries affect not only their health but also the bottom line of the companies and organisations they work for. Here are a few statistics. Absenteeism and presenteeism from financial distress are adding an extra 4% to payroll costs for UK firms (Barclays, 2014). 59% of employees experiencing financial worries say money concerns have prevented them from performing their best at work (Willis Towers Watson, 2016). 89% of employers felt that financial concerns impacted on employees’ workplace performance (FCA, 2017).
Employees’ financial worries are not left at home when they come to work. That can affect their concentration and decision-making abilities. They might use work hours to deal with issues or take time off sick to sort them out. Whatever ways it manifests itself, you’re not getting the best from your employees if they’re worried about their finances and your business could be affected as a result. Very few employers are in the position of being able to offer substantial pay increases to help alleviate financial concerns, but there are things you can do to offer help and ease the pressure.
Make sure your payroll processes are reliable
Payroll errors can happen and they can cause real problems for your employees. They rely on knowing they will be paid accurately and on time in order to pay off their own financial commitments like mortgages and other repayments and to cover day to day expenditure and bills. Any kind of failure of payroll processes is going to add to the problem for them. So if you are aware that your payroll processes are not as efficient and reliable as they should be perhaps it’s time to take another look at what can be done to improve them.
Help with financial education
Employees might not want to share the fact that they are having financial problems. But you can make financial education part of regular learning opportunities or your wider wellbeing/employee benefits or assistance programme and that can make it far easier for employees to feel they can participate.
Courses could cover subjects like budgeting and debt reduction. Pension planning education can provide guidance on the schemes while encouraging employees to think about how much income is needed in retirement, effectively becoming a path to wider financial education. Depending on your budget, you could consider offering employees access to a regulated financial adviser. If you do end up providing support via an employee assistance or benefits programme, remind employees regularly about the specific services available and how they can be accessed.
Consider ways to offer saving in the workplace
There are many ways to set up a payroll savings scheme in your workplace for employees to use. Options include workplace ISAs and Save As You Earn (SAYE). For larger companies, credit unions could be an option (which may also allow opportunities for employees to borrow at very competitive rates and have repayments taken directly from payroll).
Even if you don’t have the resources to provide financial education or offer payroll saving schemes, you could still take advantage of support services like the Money Advice Service. Consider signposting its ‘Making the Most of your Money’ advice pages on your website perhaps, and sending out copies of its guide to all employees. By removing the taboo of discussing money concerns in the workplace, you’re doing something really important for them. Supporting their financial wellbeing is a valuable way to have happier, more productive and more engaged employees. It can also help you become an employer of choice, making staff more likely to remain with you.
If you feel your payroll processes are not as effective as you want them to be, we offer a range of solutions including our cloud-based Legislator™ payroll software and flexible payroll outsourcing services. Please contact us if you would like to find out more.