Tackling financial stress in the workplace – Part 2
The 4 main reasons employers are not tackling financial stress in the workplace.
Taken from the findings of the Workplace Financial Wellbeing LinkedIn Group’s July Conference, part one of the blog looked at why people do not have time, budget or resource to tackle financial stress in the workplace.
In part two of his blog, Darren explains why you need leadership buy in and how to go about creating your own financial wellbeing strategy.
Leadership team buy in
With so many other important items on their ‘to do’ list, financial wellbeing is often pretty low on the priority list – until such time as it manifest itself as a staff turnover or absence problem, and then starts to cost the business. It then becomes an important challenge to tackle, much of which could have been avoided with earlier intervention.
One of the most important outcomes for the individual responsible for employee financial wellbeing is to grab the execs attention for long enough to be able to explain the problem and the looming negative impact. Once they are ‘sold’ on this concept the next step is to present the business case.
If the individual responsible can pull this off, they will become a valuable asset to the business and they will certainly have changed the lives of many employees for the better.
How can you achieve this?
The execs need to see evidence.
Take a look at the employee turnover figures, the rates and frequency of absence. Calculate the cost of lost days, the downtime waste caused by the constant orientation of new hires and those enormous recruitment agency fees! Compare the figures to pre 2008 financial crisis days. Illustrate trends in the negative and costly impact of a potentially less engaged, lower productive, unhappy workforce. Fast forward those trends into the future – 1, 3 and 5 years from now and paint a picture of how things might look if interventions come too late.
If obtaining all this information is difficult, try an employee survey such as PFEEF’s Personal Financial Wellness Score, where the invisible becomes visible. It can show an employer very quickly and precisely where the highest levels of stress are in the workforce and exactly what areas are concerning them.
PFEEF’s online ROI calculator can also help predict what a business can expect in terms of ROI for a specific budget set aside which makes it an easier conversation around the board table.
The good news here is that the vast majority of business execs are great human beings and truly care for their employees and once they are presented with the problem they simply want to invest in financial wellbeing because it’s the right thing to do. Your management team won’t need a lot of persuasion, as long as you present it with conviction.
There are so many options, I don’t know where to start
OMG! Financial wellbeing experts seem to be popping up all over the place! And it is confusing the hell out of employers.
From financial advisers, insurance companies, employee benefits consultants, wealth managers, robo-advisers, workplace savings portals, financial educators, flex benefit providers, banks, share save providers through to payroll lenders and debt consolidators, there is no shortage of options for employers to consider. But the sheer breadth of choice can be overwhelming and has become a blockage in itself.
Due to the lack of available budgets, we have seen “free to employer” propositions coming to market and getting a lot of attention as they often have significant investment backing to invest in their marketing strategy.
I would suggest exercising caution here. Take a close look at their business model. Ask yourself the question “What’s in it for them?”
If the financial wellbeing proposition is “free”, it may be because the proposition will lead to your employees investing or borrowing, which is what the shareholders and investors want to see and this is what drives these companies economic engine.
I am not saying that this is always a bad thing, far from it.
Investing for the first time is very positive and consolidation of badly managed debt to cheaper options deducted from salary can rally help employees get out of a pickle.
But make sure you look before you leap. Satisfy yourself that the proposed business model is not overly biased towards what’s in the best interest of the proposition provider instead of the best interest of your employees.
If you work very closely with the providers of the “free” stuff you can definitely get the best out of it. But if you want to be totally sure and haven’t the time to keep an eye on things every week, then play it safe and introduce financial wellbeing propositions that are paid for up front and are profitable in themselves and not reliant on your employees’ subsequent behaviours. Any follow on activity should be a natural outcome of a great and well executed proposition.
To ensure the optimum selection from the propositions available to create your financial wellbeing strategy there are 2 things you ought know and have clear:
1. Know exactly where you are today in terms of employee financial stress
2. Have very clear objectives of where you want to be in the future.
To know exactly where you are today you can do a number of things:
1. The PFEEF financial wellness survey is a great start.
2. Run an employee forum to discuss the issues in a confidential setting.
3. Ask an expert to review the effectiveness of your employee benefits comms.
4. Run a financial education pilot with a representative sample of employees, ask for feedback and check which areas are important to them.
A solid foundation of appreciation of your financial employee benefits is a great platform to build a financial wellbeing strategy upon.
Unfortunately, most brilliant employee benefits packages are communicated poorly and underappreciated.
Employees receive money if they work, if they get ill, if they die and when they retire – what a great foundation to financial wellbeing!
Sometimes it’s better to go back to basics and enhance the perceived value of benefits before broadening the financial wellbeing to other aspects of financial matters.
Once you have done some or all of the above points 1 to 4, you have useful intel to then focus on the most important areas and this enables you to create a clear vision of what you are trying to achieve. Once you have this clear vision, your selection of what propositions and what strategies to adopt first become very straight-forward. It takes the guess work out of the process and you can then ensure that your budget and investment in time is deployed in the optimum and most positively impactful way for your employees and your business.
Good luck out there, I really hope you succeed in your endeavour for a happy workforce. If you haven’t already, join the Workplace Financial Wellbeing group on LinkedIn where you can be kept up to date with the latest developments, best practice, events and lots of useful tips and ideas.
Feel free to pop me any questions you may have, you can reach me at firstname.lastname@example.org
All the best