The cost of living crisis is affecting us all - in various degrees and in different ways.
As prices surge everywhere you look, from supermarket shelves to your energy meter, the idea of trying to set aside savings seems impossible.
But the lack of a cash buffer is causing many people stress as the crisis rolls on.
Over one in four (27%) people say not having an emergency savings has been the biggest cause of financial anxiety in the past six months.
Money worries not only affect our personal lives, physical and mental health, but also our work.
Two in three working adults say financial stress affects their work performance, according to Claro Wellbeing’s latest research on The Workplace Today.
Employers are rightfully concerned about their workforces’ financial resilience - the ability to cope with unexpected expenses - but may not know how to help. Below, we’ve put together some tips:
Conduct a financial health check
Before you do anything, try and understand more about your employees’ financial situation. Do you know how many may be struggling with debt and how many might be trying to save for long or short-term goals? Consider asking staff to fill out an anonymous questionnaire about their money concerns so that you can tailor any guidance to their needs.
Don’t assume anything. For example, a high income does not necessarily mean someone is financially secure. In fact, it can often mask poor financial behaviour.
To get a better understanding of your workforce's financial health - and the impact on your business - try our Financial Wellbeing calculator.
Consider introducing financial wellbeing resources at work
There is a huge financial education gap since many of us were never taught it at school. Many of us may not have learnt good financial habits from our parents growing up and as a result may not have a good relationship with money.
A financial wellbeing programme, that includes accredited coaching, on-demand courses and interactive workshops, could not only help your staff build a good savings habits but also support them with their financial goals at each stage of their life. For example, buying their first home, starting a family and preparing for retirement.
A financial coach can offer one-on-one sessions tailored to the individual’s needs and suggest the best ways for them to save and how to set realistic goals, based on their circumstances.
Meanwhile interactive webinars and workshops on saving and budgeting can be delivered to whole teams to help give them the tools they need to save effectively.
For example, sessions could be run on saving that explain the 50/30/20 budgeting method (where you spend 50% of your income on your necessities, 30% on things you want, while 20% is saved) as well as encouraging staff to set up automatic payments into their savings each month, even if it’s just £10 a month to start.
Consider a financial wellbeing provider that includes, in addition to face-to-face guidance, supporting technology to encourage good saving habits such as budgeting platforms, calculators and online courses.
Are you offering a benefits package that your employees want? When was the last time you reviewed it? For example, while a cycle to work scheme may have been popular before lockdown, you may find there is less appetite for it now that more people are working from home.
Are there things you can introduce to help staff save? For example, one free lunch a week, a travel allowance or allowing staff more flexibility to allow them to work from home and save their train fare, childcare vouchers or discount schemes.
As well as a financial wellbeing programme, could you consider offering other benefits to help employees save such as Share Schemes and Workplace ISAs. Financial education is a crucial part of engaging employees with these and how they work.
Ensure that employees understand their pension
One of the most effective ways to save for the future is via a workplace pension scheme. But do your staff know this?
While it’s difficult, especially for younger workers, to imagine saving for a retirement decades in advance, especially during the cost of living crisis, some good communication and education around pensions could ensure they understand the benefits.
Another thing to consider is whether the business could also increase its own pension contributions beyond the statutory minimum or match employees' pension contributions to encourage pension savings?
Don’t tell employees what to do - get the experts
No business wants to risk offering poor or incorrect financial advice to staff or appearing patronising.
Instead, consider introducing experts, such as financial coaches, to offer guidance around effective saving and budgeting and encourage positive relationships with money.
This option may also appeal to staff who would rather not speak directly to their employer.
Amelia Murray
