Previously, when companies provided employee benefits and perks, they often funnelled resources into generic offerings such as fruit baskets, gym memberships and healthcare. But a remarkable transformation has occurred in recent years, with financial wellbeing now taking the spotlight as the linchpin of employee support and HR initiatives.
Financial wellbeing is being increasingly recognised for its unrivalled ability to bolster employee welfare and resilience, retention, talent acquisition and cost cutting. More specifically, there has been significant headway made in championing financial wellbeing since 2020, with many employers adopting a more proactive stance towards their employees' overall wellbeing and becoming increasingly aware of the pivotal role financial stability plays in this.
We cannot forget, however, that a sizable chunk of this progress stems from dire necessity, as businesses have been forced to reactively grapple with socioeconomic upheaval. And so, as financial wellbeing support reaches a critical moment in its evolution, businesses must re-evaluate their approach.
Four years of seismic shifts
Boundaries between our professional and personal spheres melted away amid the lockdowns of the pandemic, causing a monumental shift in work patterns. Flexibility became a top priority, with people demanding more control over how, when and where they work. Naturally, employers were left with little choice but to respond to this shift.
At the same time, many wrestled with heightened anxiety and other health issues during the pandemic. Organisations’ social responsibility to support employee wellbeing therefore came to the forefront of corporate discussions, with the important relationship between physical, mental and financial health becoming increasingly acknowledged.
Mintago’s recent research revealed that the work performance of half (49 per cent) of UK employees was impacted by stress and anxiety, suggesting that supporting employee wellbeing isn't just a moral issue, but an important business decision for maintaining productivity.
Lower productivity isn’t the only issue for companies to consider – there is a heightened risk of losing employees too. The Great Resignation took the labour market by storm during the pandemic, as millions took stock of what they wanted out of their roles and who they wanted to work for. A more dynamic job market meant employers had to offer better opportunities to attract and retain top talent, while workers began searching for better pay, benefits and company culture, en masse.
Shortly thereafter, the cost of living crisis catapulted personal finance and financial wellbeing into the limelight. In 2022, the UK grappled with the lowest real wage growth since 1977 and many workers struggled financially. Employers equally felt the burden of rising costs, turning to enhanced benefits like financial wellbeing support to retain staff when offering higher pay proved impossible.
Moreover, inflation's relentless assault on employee finances spurred many to proactively seek financial wellbeing support from their employer. Indeed, it has emerged as a key factor in their career decision making, and Mintago's research has found that 44 per cent of UK employees are willing to jump ship for more robust support.
Facing the future of financial wellbeing
Despite evident progress in recent years, financial wellbeing support must continue its evolution. A strong financial wellbeing strategy cannot be based on reactive measures and surface-level fixes. With so much at stake for employees and employers alike, forging meaningful, robust and impactful support requires a proactive, forward-thinking approach.
Thinking beyond the pandemic and the cost of living crisis, the future of financial wellbeing hinges on businesses applying well-executed, comprehensive and tech-driven strategies. Such strategies empower workers to confidently navigate their financial landscapes by equipping them with the necessary tools for success. With this in hand, businesses will be poised to reap the rewards from the fulfilment of their duty of care to staff and creation of an appealing company culture, with increased employee retention.
When considering the specifics of a strategy, it is vital to note that a one-size-fits-all approach typically falls short. Employers must identify and cater for the diverse financial needs of their workforce, whether it be a fresh graduate grappling with pension contributions for the first time, a mid-career professional seeking investment advice or an older employee planning their retirement.
By opening a dialogue to identify which employees would like support and in what areas – for instance through an online survey or one-to-one interview with HR – businesses will be primed to provide impactful solutions, and can better avoid invading employees’ privacy or providing irrelevant support.
There are a number of ways that employers can provide robust support that warrant exploration. For example, solutions exist that allow employees to manage their pension contributions via an online dashboard. They can also improve their financial wellbeing through access to a vast library of online educational resources and cutting-edge, AI-powered chatbots that can answer financial queries in a timely fashion. Moreover, companies can also provide access to independent financial advisers, to help employees manage more complex financial issues and provide personalised support.
While financial wellbeing support has made significant strides in recent times – particularly in the face of the pandemic and rampant inflation – there remains considerable progress to be made. Building a contented, satisfied workforce requires a proactive, forward-looking stance towards financial wellbeing. Organisations should make continual efforts to improve and enhance their support systems, with robust, impactful solutions, even in times of relative tranquillity.
Mintago stands at the forefront of this evolution, with numerous organisations having already embraced our platform to support their workers. Together, we must pioneer new frontiers in the realm of financial wellbeing support, increasingly recognising it as a core pillar of HR and people management.
Chieu Cao is the founder and CEO of Mintago