Think of the economy of the last few years. Not a pretty picture, hey?
While the outlook for 2024 looks more positive, we’re not out of the woods yet. A UK election this year, plus uncertain geopolitical situations like the wars in Ukraine and Gaza, means we can’t take any bets on a future economy.
Businesses still face tight budgets and a competitive market, all while trying to do right by their staff. Meanwhile, households have living standards below pre-pandemic levels. A recent report from PWC revealed that finances are the biggest source of stress for 57% of employees.
Financial wellbeing is set to be employers’ biggest challenge in 2024 – but businesses should also think of it as an opportunity. Done well, financial wellbeing initiatives have a tangible business impact that extends beyond the immediate future.
Let’s take a look at how financial wellbeing can help your business…
…if you can’t afford to give pay rises
59% of full-time employees say that their compensation isn’t keeping up with the rising cost of living. And while (we hope) most employers want to pay their staff well, it’s not always feasible to grant them straight away.
In fact, 22.6% of employers say that pay increase requests are set to be their biggest challenge this year. And that’s where financial wellbeing comes in.
If you can’t afford raises right now, providing financial advice can help your employees make their paychecks go further. Give generic advice – like content or a webinar – and 14% of people can make a decision that will benefit them. Make it personalised advice – from a financial coach, for example – and you’re looking at 75% of people. A real win while you’re riding out this tougher time.
And, personalised advice helps every employee, no matter their age or job title. From buying a home, navigating their first bonus, a promotion to Partner, a divorce, death, remortgaging and more, finance is personal – so why should our financial wellbeing benefits be generic?
…if you need to reduce headcount
Making redundancies: never a situation that a business leader wants to find themselves in. Unfortunately, headlines announcing job cuts have become more and more commonplace – the redundancy rate in the UK has increased by 56% over the past year.
We all know that redundancies have a significant impact on those left behind, as well as those leaving an organisation. The remaining employees are likely to feel financially insecure, which can have a serious impact on engagement and even retention rates. Providing extra support can help mitigate the impact of redundancies on your culture.
It’s also incredibly helpful for those placed at risk of redundancy or those considering voluntary redundancy. A recent report from PWC recommends providing one-on-one financial coaching here, so employees can make the best decision in this situation.
…if you need to improve engagement
Financially stressed employees are five times as likely to admit that personal finances are a distraction at work. Just 50% say they feel energised at work, and 59% would recommend their employer as a great place to work.
The cost of a lack of disengaged employee to their employer is huge: 18% of their salary. And with so many employees stressed about money – 57%, remember – that’s a big financial impact.
Reduce financial stress – by improving basic financial literacy, improving your compensation packages, or providing personalised advice – and you reduce its impact on your bottom line. Simple.
…if you need to improve retention
1 in 5 employees are at high risk of leaving their jobs in 2024 – a figure that HR teams are responsible to change.
Show you care about financial wellbeing, and you show your people you’re worth sticking around for. 73% of employees said they’d be attracted to an employer that cared more about their financial wellbeing. Indicating you do is a lot cheaper than replacing an employee – 2x their annual salary, in fact.
Ensuring financial wellbeing at your business has never been more essential. Yet look to the long term, and the benefits are obvious too. Invest now, and you’re making a futureproof investment with guaranteed impact whatever happens. Don’t miss out.
Want to learn more about financial wellbeing initiatives in the workplace? Just head here.
