10 ways to ease staff money worries and empower your team

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Staff financial wellbeing is a business issue as well an emotional one. Someone needs to make the first move. Isn’t it time you took action?

Chances are, financial wellbeing is stressing out your staff. You mightn’t be able to pay them more but there are other ways you can help, where you will see ongoing benefits too.

1 in 3 UK families are just one missed pay check away from losing their home*. The cost of living is on the rise. Financial wellbeing is the biggest worry among the UK workforce: it makes for sleepless nights and results in over 16million sick days every year.

Debt related stress can cause:

  • High sickness levels
  • Low productivity
  • Serious mental health issues
  • Long-term absence

How to help employees’ financial wellbeing – without paying their debts off for them

1. Don’t think of employee debt as ‘not my problem’

Chances are your staff are worrying about money, suffering in silence and having problems with anxiety: half of people in debt endure mental health issues.

If your staff are enduring mental health challenges, it’s likely to affect performance at work.There are huge productivity gains to be made from having relaxed, engaged employees. You have a vested interest in reducing stress levels wherever you can. Fortunately, there’s lots you can do.

2. Handle the situation sensitively

The list of people you wouldn’t be comfortable talking about debt issues is a long one, and your employer is right near the top. That said, the employer is in a strong position to help.

  • Send in your most emotionally intelligent, well-liked team leaders to raise the issue
  • Give a lot of thought to how you word any internal communications pieces
  • Make any application processes extremely discreet

3. Help debtors become savers with workplace schemes

Want to offer your staff a route out of the circle of expensive credit card / pay day loan debt? You can engage with services that extend loans of up to £25,000 (at a fixed rate well below pay day loans).

The employee pays the loan off through their salary, via the company payroll. The advantage for the employee is circumnavigating the need for a credit check – they can still get the loan even if they have a bad credit history.

Once the debt is cleared, the employee can carry on having the amount deducted from their salary – only this time the money can be paid into a savings account to build up a nest egg.

4. Saving for retirement: you need to plan ahead so your staff can

Roughly 1 in 4 of your staff will be worrying about the other great financial problem of our age: how to save enough to retire. Contributing the rock bottom, bare minimum is unlikely to nurture any feel-good factor around the place; if you can possibly afford to reward saving more and match higher sums, it’s well worth considering.

Also bear in mind that the minimum contributions are set to rise year-on-year. Planning ahead to bear these extra costs is essential, for employers and employees alike.

5. It’s unwise to supply a financial advisor…don’t do it…

You staff may crave financial advice, such as whether to collate several pensions together and how to do it. It’s risky to offer a financial advisor of your choosing, as you can be held responsible for that advice – if it goes wrong, the financial advisor and your company could both be sued. There’s no requirement to provide financial advice, so don’t do it.


6. …but consider paying for your staff to get reputable financial advice

You can make a tax free contribution to your staff getting a financial advisor to provide bespoke advice on their situation. But it is important they choose their own advisor, from a list provided by the Money Advice Service. The allowance can be anything up to £1000. It can paid via salary sacrifice, or directly as a benefit from the employer.

Using this route, employees are guaranteed personal advice on how to save for a pension… without you taking responsibility for what the adviser has said.


7. Share impartial literature from The Money Advice Service – lead the horse to water

Particularly good for a workforce with low levels of financial awareness, The Money Advice Service has some good guides on a variety of topics around money management, such as mortgages and pensions.

Sending PDFs over email or having hard copies where employees could discretely pick them up might help them start off on a journey towards saving for their future. The Money Advice Service Guides are particularly good for a workforce with low levels of financial awareness.


8. If you can afford it, offer life insurance and income protection…

One of the most worrying factors of financial woe is what will happen if a breadwinner is incapacitated or passes away.

Life insurance has a standard 4X salary pay out if the worst happens – this can provide a lot of reassurance and help soothe workplace anxiety. 
It’s a definite nice-to-have for many companies, some of the most progressive outfits consider it essential, as a part of a well-rounded employee value proposition.


9. …if not, help them get better deals with combined buying power

If you can’t or don’t want to pay for life insurance for your team, you can assist in other ways. For example, your staff can get much better rates by negotiating as a group - and of course, premiums can be deducted from salary to make things easy.

For smaller companies who cannot afford to go beyond the statutory requirements, this can be a good way to show you care.

10. Offering training sessions in financial wellbeing

Financial literacy is quite low in the UK. 79% of people know what LOL stands for, but only 50% of people can say for sure what PAYE means.** 

This is an extreme example of a much wider problem – your staff could be getting into financial strive simply because they don’t understand how they could do better.

Providing workshops and training sessions for reputable providers could help improve understanding and empower your people to make smart choices – once they do, there should be less sleepless nights and more productive days.

Payday loans are not just for unemployed people: 4 of every ten UK workers have less than £100 in savings. 1 in 4 people in the UK are revolving a credit card every month or using payday loans to make ends meet.***

Only 1 in 3 UK employers have financial wellbeing programmes in place 

Creating a financial wellbeing programme could give you a distinct advantage over your competitors. 

Moreover, your employees need you to step up and champion their financial wellbeing. Don’t bury your head in the sand.

 

Source:

* Shelter

**Nationwide

*** Financial Wellbeing in the Workplace: A Way Forward”, HM Treasury and the Financial Conduct Authority, March 2017

 

About the author

Tina Jennings

020 7648 7011 Email