Financial wellness shouldn’t be a taboo subject in workplace - Samantha Gaughan

Major employers including Pret a Manger and Tesco have been praised for offering multiple salary increases as the rising cost of living and high inflation put the squeeze on staff.

The reality is the majority of businesses can’t afford to take such measures, even when most want to support their staff in an economic climate that for many means a real-terms pay cut.

Research by Lancaster University's Work Foundation think tank found just 40% of businesses have introduced support measures for staff since the start of 2022.

That’s despite almost two thirds (66 per cent) recognising they have a ‘substantial’ role to play in supporting their team during the cost of living crisis.

Samantha Gaughan is Employee Experience and Learning Consultant at Connect Three, a B-Corp accredited leadership consultancy that helps improve businesses through their people

With wholesale salary increases off the table for most, many businesses have made one-off payments or bonuses ranging from £900 to £2,000 and beyond to staff to help them in the current climate.

This may appear a sensible and supportive move on the face of it, however, it is a short-term and often-ineffective treatment – a sticking plaster that doesn’t get to the root cause of the challenges employees face in the cost-of-living crisis.

Firstly, that payment is taxed, meaning a higher cost for employers and lower impact for employees, and with no certainty around how long the cost-of-living crisis will continue, it does not provide an effective long-term solution. That money would be better invested in lasting supportive measures.

Instead, employers should focus on supporting staff through farther looking policies and practices that provide them with the tools to navigate challenging economic conditions and beyond.

A shift in mindset is also required. Financial wellness is traditionally a taboo subject in workplaces – but it shouldn’t be. In the same way conversations and approaches have progressed around mental health, leading to more open discussion in the workplace, people must feel more comfortable discussing financial matters.

That doesn’t mean going into detail about bank balances or monthly bills, but it does mean discussion around challenges and potential solutions posed by the cost of living. Every employee is different, and factors such as home life, transport, and dependents must all be considered.

Supporting the financial wellbeing of staff can bring a raft of benefits, from a healthier working environment to improved productivity and staff retention. What’s more, in the wake of ‘The Great Resignation’, employees place more value on the long-term benefits and support they receive from employers – and support on financial matters is an increasingly important part of it.

So what can employers do? Here are six steps employers can take to improve the financial wellbeing of staff.

1. Culture: Foster a supportive environment where staff feel comfortable discussing financial matters – from bank accounts to tips on tackling cost-of-living challenges. Employees are all facing similar challenges, and peer-to-peer support can be extremely valuable for mental and financial health
2. Financial wellbeing events: Bring in experts to provide advice on financial matters – from budgeting, to pension planning, and to savings and even investments. While some employees may be well-versed in financial matters, many may not, and providing expert advice can make a big difference. Organisations such as the Money and Pensions Service provide this service free of charge.
3. Support: Consider providing cost-of-living vouchers to support staff with specific costs, such as public transport, childcare, or shopping. It ensures more targeted financial support goes to the right areas and can make a big difference to employees
4. Long-term thinking: Consider enhanced pension contributions to encourage staff to remain in schemes. A high percentage of people have opted out of pension schemes due to COL, losing long-term benefits and security, and an additional one per cent to two per cent from employers can encourage staff to think long-term and also improve retention rates
5. Consider other benefits: Benefits packages – such as optional health insurance – provide staff with security and stability they may want to purchase privately but may not have the means to. It’s an investment for the business, but will provide a return through retention and motivated employees
6. Work from home allowance: During the pandemic, many employers provided work from home allowances to employees to account for additional costs such as heating and electricity. Some employers may consider introducing enhanced policies for staff working from home during the cost of living crisis to account for the additional price of energy.

Samantha Gaughan is Employee Experience and Learning Consultant at Connect Three, a B-Corp accredited leadership consultancy that helps improve businesses through their people