How to ensure your employees are using their employee benefits to form solid economic foundations for financial wellbeing
The pandemic has left many employees struggling with their wellbeing. From their mental and physical health through to their social and financial wellbeing, it’s been a tough time for many. One area though, which has significantly impacted the lives of a lot of households, is the financial impact of the pandemic. With money worries causing employees to lose focus, feel demotivated and financially out of control, it’s important that employers recognise these signs and help employees to improve their financial wellbeing.
There are four key pillars to financial wellbeing:
- Habits and behaviors – living within our means
- Operating with low levels of financial stress – reducing and minimising where possible
- Wealth creation mindset – having goals
- The foundations – solid economic foundations
As an employer you can support employees with many of these but especially with the foundations. The employee benefits you provide could help form the solid economic foundations your employees need. The problem can sometimes be helping employees understand that these benefits aren’t just a list of products, they have a purpose. To help, here are a few ideas on how your employees could start to form their own foundations:
Life assurance/Death in service
In most cases, the amount provided by death in service is not enough for all employees’ particular needs, but it’s certainly a good start. It’s important that each employee seeks advice to get an accurate understanding of their financial protection needs, as everyone’s circumstances are unique. But, as a starting point, employees should make sure that they have their debts covered. They can then work out the potential loss of income and how much would be needed to replace this. To help them get an idea of how much cover they may need to protect themselves and their loved ones, you can point them to sites such as the Money Supermarket website and their life insurance calculator. There are also other similar websites that offer this type of calculator, like Confused.com.
This may seem an obvious one, but make sure your employees know that their pension provider must have up to date details of their beneficiaries. Our lives change all the time and you never know what’s around the corner, which has become even more evident since Covid hit the world, so one out of date form could have a significant impact on those they are leaving behind.
Although sick pay arrangements vary across employers, it is extremely useful to ensure your employees know what you provide to them so that they are able to complement this when setting up their income protection foundations. Remind employees that with their income protection, the focus should be to top up the benefit provided by you to make sure that they cover their essential outgoings. It’s also worth noting to them that the cost of a top up policy is impacted by their age, type of job, deferred period and hobbies.
Whether you provide paid for private health cover, discounted medical insurance or money off dental or eye appointments, this can all form part of an employee’s economic foundations. When these types of costs are covered, this money can be used elsewhere like into savings, investments, or other family protection policies.
Shout about the benefits
There are many positives to employees using their employee benefits to form part of their economic foundations. And it’s important to keep reminding them of this. A few key benefits are:
- Some benefits are free and have no cost at all
- For those benefits that do have a cost, they are usually much cheaper through an employer
- Most employers will get a quote for their employees and some will even do the paperwork
- Some employer provided policies have less underwriting required
Don’t forget that each employee is different, so it’s a good idea to take a multi-channel approach when communicating these benefits. You can use email, posters, webinars, a benefits portal and more! Using different methods will make sure you reach all your employees.
Knowing where to start
When forming solid economic foundations, it can often be hard for an employee to know where to start. Ensure they begin by reviewing all their company benefits along with their own provisions. If they feel that there are some shortfalls, then it’s best to try and quantify this and then seek advice or guidance if needed. Remember, always make sure they focus on budget because they want their policies to be affordable for the long term.
And finally, always remember to keep communicating what’s on offer to them. Everyone has a lot going on in their lives so what might not be a good time one day, could be the perfect time the next!
Secondsight are multi-award winning employee benefits, workplace wellbeing and financial education specialists. If you would like to find out more about how we can support you and your employees with any of the above, please contact us today.
Secondsight is a trading name of Foster Denovo Limited, which is authorised and regulated by the Financial Conduct Authority.
Information correct as of 18/02/2021