Employers should take a more active role in supporting workers’ financial wellbeing, delegates were told at the CIPD Employee Benefits Conference on Thursday (12 March).
Speaking at the event, Jennifer Roberts, head of reward and wellbeing at Our Co-op, said financial pressures can significantly affect employees’ ability to focus and perform at work.
“If you’re stressed about your finances at work, that can be really distracting and impactful on the working day,” she explained.
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Research from HR software provider Zellis found 92 per cent of employees experienced financial stress in the past year, while 89 per cent said it had negatively affected their work at some point.
Roberts said financial wellbeing had become a key part of Our Co-op’s wider wellbeing strategy, adding that employers should recognise that workers have different levels of financial knowledge and experience.
Through the financial wellbeing platform Stream, the organisation introduced an earned wage access tool to allow employees to receive a portion of their salary before payday.
“We had feedback from colleagues saying [they no longer] have to use high-interest credit cards or payday loan companies,” she said.
Roberts added that the organisation initially expected employers to use the feature mainly to access their pay early, but many were instead using the platform’s saving tools.
“There’s always that myth that people are going to use it to drain their pay before payday, but the attitude was: ‘I’m saving for my future and unexpected expenses that might crop up.’”
Salary sacrifice schemes are also increasingly being used to help employees manage their finances more effectively, according to Natalie Izzard, head of partnerships at The Electric Car Scheme. This can include helping employees to access items they maybe could not otherwise, or to support them to use their salary in smarter ways; for example, by reducing the amount of tax paid.
She added that some lower-rate taxpayers were now engaging with schemes such as second-hand car salary sacrifice as a way of making their income go further.
“If you’re paying less tax, in theory you’ve got more money to divert into a savings scheme or direct towards something else that might have been seen as a luxury,” she explained.
Financial wellbeing strategies still evolving
Vikrant Bhuskute, reward director at BT, said that, to improve financial wellbeing, employers should focus on practical support that reflects the pressures employees are really facing, reaching out to colleagues to find out what would help most.
“At BT, two of my colleagues held employee forums and focus groups to ask about financial wellbeing, and half the people who responded did not understand what it meant,” he added.
Bhuskute advised companies to focus less on language and more on offering accessible tools and support.
The telecoms giant recently piloted a January salary advance scheme, allowing employees to access part of their pay and repay it over three months. Demand was higher than expected, with some employees requesting advances as small as £150.
But, Bhuskute warned, “an advance scheme without something like a savings scheme to go hand in hand is not a great idea”.
Communication is also important when introducing financial wellbeing support, particularly for employees who do not work at a desk. Roberts said organisations should ensure employees can access financial wellbeing tools in ways that suit their roles and working patterns.
“Sometimes when I need support, I just don’t want to have to get it when I’m at work,” she explained. “I want to take something away and look at it in my own time.”