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5 ways to improve your employees’ financial wellbeing

June 9, 2023
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We’ve all heard the clichés about how material possessions don’t bring happiness, but unfortunately, the lack of them does stir up much anxiety. In an ever-increasing cost-of-living crisis, and with food inflation rates reaching an all-time peak last year, more and more people are struggling financially, and so it’s more important than ever for businesses to support their people in these times. Luckily, there are many things companies can do to help their employees’ financial wellbeing.

What is financial wellbeing?

Financial wellbeing is about feeling secure in your financial situation. This includes the sense of being in control of your money, knowing you’re capable of making your payments, and believing that, if an unexpected expense occurred, you’d be able to cover it. Ultimately, financial wellbeing is trusting you’re on the right path with your finances and not worrying about whether you will be able to afford things in the future.

Why is financial wellbeing important for businesses?

From life expectancy to mental health, your socio-economic situation can impact almost every aspect of your life, and this is also true for your employees. Beyond the obvious — caring for your employees’ financial wellbeing is important because you care about them and want them to be happy — there are real, tangible business reasons to support the financial wellbeing of your staff.

80% of employees believe that stress around their financial wellbeing negatively affects their performance at work, so it’s no wonder that, according to the Financial Post, financial stress cost over $40bn in lost productivity in 2022. So, caring for your employees’ finances can help your business become more productive, profitable and engaging, as well as reduce turnover.

Further reading: Why you should care about your employees' financial wellbeing

How to improve employee financial wellbeing?

There is plenty you can do to support the financial wellbeing of your employees. Here are our recommendations for building an effective policy:

1. Carry out regular pay reviews

The best way to help your employees deal with financial stress as their main source of income is to… well, increase their income. While it’s not a particularly groundbreaking piece of advice, it’s the most effective way to increase financial wellbeing. That being said, it’s more than simply giving them a raise — it’s about making them feel like they’re not stagnating and that their loyalty to the business, as well as professional progress, is not going unrewarded. That’s why you should incorporate an annual pay review for all employees.

2. Provide financial education

Did you know that, in the UK, those earning between £10k-30k a year have almost the same level of financial worries as those earning £90k? Of course, there are a number of factors that impact this, including different lifestyles and levels of financial responsibilities. However, it still shows that financial wellbeing is not just about how much money you earn. Providing your employees with the resources they need to live a healthy financial life is invaluable. This can include financial advisors available for consultation, or financial education courses that cover anything from budgeting to investing and debt management.

3. Conduct anonymous surveys

The simplest measure you can take to combat financial stress in your company is to ask your employees what they’re struggling with and what they need from you. However, just randomly asking individual staff members might not produce the best, most reliable results. Instead, opt for anonymous culture surveys that can help you decipher where your employees require support the most. Thrive, for example, provides a variety of surveys and assessments that can help you easily identify your employees’ financial concerns and find solutions that will work for your business specifically.

4. Provide pay on-demand

Unexpected charges. Rent or bill payments. Upcoming holiday instalments. These are just some of the annoying but necessary expenses that can pop up and make your payday pretty miserable. Besides increasing wages, which is sometimes not a viable option, there’s a hot-topic solution: on-demand payroll, or ‘earned wage access’. This allows employees to access the wages they’ve already earned before their usual payday. Giving this option to your employees means they can access money when they need it, rather than when an arbitrary payday has arrived, giving them a little more leeway.

5. Re-evaluate your benefits and bonus scheme

A pay package doesn’t only include a base salary, but also any bonuses or benefits you provide. Consider whether your packages and structures are up to date and in line with the market, and if they aren’t, amend them accordingly. Perks shouldn’t be dismissed, as a huge part of financial stress is feeling like you can’t afford ‘luxuries’ or fun activities, so even free or discounted cinema tickets could make a huge difference.

If you want to learn more about how Thrive can help your employees’ financial wellbeing, book a demo with us today.

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