The ultimate guide to employee financial wellbeing

Employee financial wellbeing is an umbrella term that covers a number of connected concepts. In the broadest possible sense, it refers to employees feeling secure in their financial status.

Many people do not have financial resilience. They might have enough money to get by on an average day, but sudden changes (such as injury, illness, a move, or a sudden breakage of a key home appliance) can cause big problems. This can cause an employee a lot of stress, either because they are unexpectedly stung or because they know they could be, which leads to a lot of wellbeing problems.

There are several key elements that make up financial wellbeing for employees. If these elements are well supported, then your employees will typically have good financial wellbeing.

This one is fairly simple to understand. If an employee can’t pay their monthly expenses, their financial wellbeing suffers. 

It’s not enough to live payday to payday, employees want to be able to optimise their finances too. That means they want to be able to save money every pay cycle and avoid false economies.

Many employees simply don’t have access to clear and legible financial advice. Such things cost time and money. That means there are many aspects of financial wellbeing (such as pension planning and optimisation) that they’re simply not aware of.  

Budgeting, saving, investing and spending as effectively as possible are all critical parts of employee financial wellbeing. Strong money management skills give employees more financial resilience, and the ability to withstand sudden changes to their financial situation. 

There are three key reasons why a business should offer some form of financial wellness programs in the workplace. By supporting financial wellbeing at work, you can ensure your employees feel secure, but this also leads to numerous benefits to your organisation.

The link between mental wellbeing and physical health are well documented by this point. If your employees are constantly stressing about their finances, this can have long-term effects on their general wellbeing - 25% of workers have reported losing sleep over money worries. This leads to more cases of absenteeism, poorer workplace performance and lowered employee engagement. 

Around 8 in 10 employees admit that they take their money worries to work, with 77% admitting that this impacts their performance. Simply put, if you want to get the best out of each employee, you need to give emphasise financial wellbeing at work. That will ensure they can keep their focus where it’s needed. 

When employees are stressed about their financial wellbeing, they naturally become less engaged. Stressful things at work become a much bigger problem, and even minor problems can become the straw that breaks the camel’s back and cause them to leave for a new employer. 

It’s clear that its vital to the wellbeing of both your employees and your broader organisation that you offer financial wellbeing support for your employees. The simplest way to safeguard your employee financial wellbeing is through offering a range of flexible benefits, including services that help employees budget and increase their resilience.  

There are several ways that you can offer financial wellbeing support for your employees. This includes financial wellness programs in the workplace, but there are also simpler improvements you can make. 

There’s no way around this one. Employees that are underpaid for their expertise will never be as financially secure as those that are given a fair wage. No amount of wellbeing programmes can make up for this, so make sure you do the research about what other businesses in your area are paying for the same roles. 

Financial literacy rates in the UK are not particularly high, with almost three-quarters of people struggling with the basics. Providing a free confidential advice line can help employees make more informed decisions for both their short and long-term needs. 

All employers must now provide a workplace pension scheme, which is known as ‘automatic enrolment’. However, if you want to boost financial wellbeing, it may be work considering if you can offer a stronger scheme than is legally required. Usually this is done through matching your employee’s contributions up to a certain percentage. You may also want to consider offering better rates for longer service periods. 

Commonly seen in sales teams as a commission scheme, there are a number of other bonus schemes that you can offer. These include but are not limited to: 

• Referral bonuses 

• Retention bonuses 

• Profit-sharing 

• Spot bonuses 

• Annual bonuses 

It’s worth noting that bonus schemes don’t have to be monetary. They can also include things like early finishes, vouchers or team meals out. Consider consulting with your employees before implementing them, as you’ll uncover what bonuses would be valuable to them. 

Some employee wellbeing packages will also offer employees a discount with certain retailers, whether that’s through a direct discount or through cashback. This can help take the sting out of certain purchases. 

If you work in a B2B business, it can sometimes be worth looking at if you can negotiate some kind of discount for your employees in exchange for a discount on your services.  

Offering private healthcare insurance (usually through a salary sacrifice scheme, but there are alternatives) can help reduce financial worries over healthcare. 

Alternatives can include access to virtual GPs, which reduces waiting times and the need to go private. Dentistry can work out as very expensive even on the NHS, so this is a strong option. 

Workshops and webinars are an engaging way to teach your employees about financial literacy, which, similar to the free advice point above, can help give your employees more agency over their own finances. 

Measuring employee financial wellbeing is a delicate topic. However, there are some ways to sensitively approach the matter and build a financial wellbeing plan that works for you and your employees.

Fostering an open dialogue between employees and their managers can help keep lines of communication open, but even employees who trust their managers might find it difficult to discuss their financial worries. Anonymised surveys to ask employees about their financial wellbeing can help with this. 

With those lines of communication, you can start putting together bespoke solutions for the common issues your employees face. It's better to provide targeted support that suits your employees rather than throwing everything at the wall and seeing what sticks. 

Keeping an eye on your data records and ensuring these are accurate can show you changes to all kinds of things, some of which might indicate poor financial wellbeing among your employees. For example, changes to employee turnover rates, increased absenteeism or sickness leave and shifts in productivity can all be signs that something needs to change. 

Through our partnership with Wagestream, Financial Wellbeing from MHR can help with all manner of employee financial wellbeing concerns. From free financial advice to budgeting services to early access to earned wages, Financial Wellbeing from MHR can smooth over wrinkles that lead to poor financial health. 

Likewise, MHR’s software offers simple quality of life amendments like real-time payroll and interactive payslips, employees can be more aware of their financial situation, giving them more agency.