Lynn Graves of Scottish Widows discusses how both businesses and employees can benefit from considering financial wellbeing.
According to recent research by the Social Market Foundation financial wellbeing is as good for your employees’ bank balances as it is for their health. Financially aware employees who have put plans in place to feel more secure and safe about their long-term future are generally believed to be happier and healthier.
Over the past three years there has been a 150% increase in the number of employers considering the introduction of a financial wellbeing programme. And over that same time frame the number of employers offering this type of programme has risen by 75%. So why is financial wellbeing becoming increasingly popular?
The short answer is that financial wellbeing is that rarest of corporate initiatives – a win-win. Employees benefit from being more financially aware and ideally therefore, secure, while employers benefit from a workforce free from stress and anxiety and with fewer health issues. Effective financial wellbeing programmes have demonstrated this in turn leads not only to greater productivity but also to increased discretionary effort.
In 2013, the only financial benefit 50% of employers offered was the company pension. Today, in a climate of auto-enrolment, 96% of organisations now supplement their pension offering with additional financial wellbeing initiatives.
It perhaps shouldn’t come as too much of a surprise that Google was an early adopter of financial wellbeing, launching its ‘Optimize Your Life’ programme way back in 2010. This comprised three ‘health’ sections: emotional, physical and financial, and included classes on financial literacy, life coaching and stopping smoking, in an effort to create a healthier, happier, and ideally more productive workforce.
While this level of investment – both financial and in terms of resources – may not be an option for all businesses, implementing a financial wellbeing programme needn’t cost the earth, and by involving employees from the outset it can maintain a momentum of its own.
Understanding employees’ needs and expectations via surveys or focus groups would be an obvious start. There can be inherent employer/employee barriers to overcome so encouraging employees to help set the agenda should raise levels of engagement. Education and integration will be key elements of a successful strategy, as may be share and saving schemes, as an approach to better money management.
Other tried and tested initiatives such as cycle-to-work schemes and childcare vouchers are generally popular, while according to Scottish Widows research one in three employees would welcome access to financial calculators and tools. Good employee engagement from the outset will help determine what’s best for both your business and your employees.
There is a growing interest in financial wellbeing beyond the corporate world from politicians and government, who recognise the obvious benefits of a reduction in both levels of personal debt and future welfare dependency. Some schools have even started holding classes on the topic.
Financial wellbeing is arguably the next logical step from auto-enrolment. And while it may involve an initial commitment in terms of investment and resource, the evidence is that when employed appropriately, and with sufficient employee involvement, financial wellbeing really is a commercial win-win.
A BCC article written by Lynn Graves, Senior Manager, Market Development, Scottish Widows