Financial wellbeing - is it an employer's responsibility?

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This week, I'm talking about financial wellbeing and exploring to what extent it is? an employer's responsibility. With the rising cost of living and increasing financial stress among employees, more and more companies are considering their role in supporting their workforce's financial health.

In this newsletter, we'll explore what financial wellbeing means, why it's important, and how employers can play a crucial role. We'll also spotlight some companies that are leading the way in this area.

This newsletter will feature:

?? Graph of the week - Only 21% of companies share salary details in job descriptions, yet 83% of candidates want to see them

?? What is financial wellbeing and why does it matter?

?? The employer's role in financial wellbeing

?? Spotlight on: Companies championing financial wellbeing

?? 5 ways to support your employees' financial health

?? Sponsor my newsletter and reach over 30,000 engaged readers!

Salary transparency is becoming increasingly important, yet only 21% of companies include salary details in job descriptions. This is a big gap, especially considering that 83% of candidates want to see salary information upfront.

The demand for salary transparency stems from several factors:

1. Building trust: When companies are open about salaries, it shows they have nothing to hide. This builds trust between the company and potential employees, creating a foundation of honesty before the candidate even applies.
2. Saving time: Without salary information, candidates may go through a lengthy interview process only to find out the pay doesn't meet their expectations. Being upfront about salary avoids wasted time on both sides.
3. Closing pay gaps: Transparent salaries help reduce gender and racial wage gaps by ensuring everyone is paid fairly for the same role, regardless of background. When pay is hidden, it can allow unconscious biases to play a role in salary offers.
4. Meeting financial needs: Candidates today are more aware of their financial needs, especially with the rising cost of living. Knowing salary details upfront allows them to better plan and make informed decisions about whether a role will support their financial goals, such as housing, debt, and family needs.

Ultimately, salary transparency empowers candidates to make better decisions and helps companies attract talent that is more aligned with their expectations and needs.

?? What is financial wellbeing and why does it matter?

Financial wellbeing goes beyond just having enough money to pay the bills. It also means feeling secure in your financial future, having control over day-to-day finances, and the financial freedom to make choices that allow you to enjoy life.

Why does it matter? Financial stress can have a profound impact on mental health, physical wellbeing, and work performance. Employees struggling with financial worries are more likely to:

• Experience anxiety and depression
• Have trouble focusing at work
• Take time off due to stress-related illnesses
• Look for higher-paying jobs elsewhere

By supporting financial wellbeing, employers can help create a healthier, more productive, and more loyal workforce.

Money worries are the most common cause of anxiety and the biggest cause of stress for employees in the UK. Research from Financial Capability (Strategy for the UK) reveals that:

?? 18 million working hours are lost to financial stress in the UK every year

?? 1 in 4 workers have lost sleep over money worries

?? 59% of employees say current financial worries prevent them performing their best

?? The employer's role in financial wellbeing

So, where do employers fit into this?

While personal finance is ultimately an individual responsibility, employers are in a unique position to support and enhance their employees' financial wellbeing. Here's why it makes sense for employers to take an active role:

1. Increased productivity: Financially secure employees are less distracted and more focused at work.

2. Improved retention: Offering financial wellbeing support can be a key differentiator in attracting and retaining talent.

3. Enhanced employer brand: Companies that care for their employees' overall wellbeing, including financial health, are seen as more desirable employers.

4. Reduced absenteeism: Financial stress can lead to health issues and increased sick days. Supporting financial wellbeing can help mitigate this.

5. Better engagement: Employees who feel supported in all aspects of their lives, including finances, are more likely to be engaged and committed to their work.

?? Spotlight on: companies championing financial wellbeing

In the workplace, financial coaching refers to programs or services offered by employers to help employees manage their personal finances and improve financial wellness. These coaching sessions often focus on budgeting, debt management, saving for future goals , and improving credit scores. The aim is to provide employees with the knowledge and tools to make informed financial decisions and reduce financial stress.

Here are some Flexa verified companies who are leading the way by offering this workplace benefit

• Virgin Media O2
• Mony Group
• Tomorrow Group
• Goodlord
• Microsoft UK
• Hertility Health
• 9fin
• Unmind
• Clearbank
• Camunda

?? 5 ways to support your employees' financial health

1. Provide financial education: Offer workshops, seminars, or online resources covering topics like budgeting, saving, and investing.

2. Offer fair and competitive compensation: Ensure your pay scales are up-to-date and competitive within your industry.

3. Implement flexible benefits: Allow employees to choose benefits that best suit their financial needs and life stage.

4. Partner with financial wellness platforms: Consider partnering with apps or services that provide budgeting tools, financial coaching, or early wage access.

5. Review your pension offerings: Ensure your pension scheme is competitive and easy for employees to understand and engage with.

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