Over half of HR leaders say they must do more for workers’ financial wellbeing, with 65% saying that it will be the next big challenge for companies.
A report by Scottish Widows surveyed more than 500 HR leaders from UK firms, revealing that financial concerns during the pandemic have led to almost half of workers experiencing increased anxiety and stress. It also says that more than half of workers now look to their employers for support with financial issues.
Graeme Bold, workplace pensions director at Scottish Widows, says: “Huge strides have been made when it comes to addressing mental health at work in recent years and it’s vital that this also extends to financial wellbeing.
“The past 18 months have brought unprecedented challenges for everyone, and many people will have seen their finances drastically affected. People who are worried about their finances will often struggle at work and need extra help and support to get back on track.”
Employers Act To Help Employees Prepare For Retirement
Employers have expressed that they realise financial challenges have had a negative impact on employee productivity and motivation (40%), according to the report. A third of employers are planning to increase their contributions to employee pensions beyond the legal minimum in the next two years, with another third already making the contributions.
The report also found that employees are taking action to address their worries about finances. 65% of HR leaders say that employees are increasingly willing to discuss their mental health with their bosses. This has also led to employees turning to employers to support on issues such as increased personal costs related to working from home and saving for retirement.
HR Leaders Say Further Action Needs To Support Employee Financial Wellbeing
However, HR leaders have recognised that there is a need for further action. Over half (54%) agree that their business needs to do more to support employees with financial wellbeing issues. A third (29%) of employers have to refer their employees to an Independent Financial Advisor (IFA) to provide advice on current and future financial issues.
“Left unchecked, this problem could become a ticking timebomb for both employers and employees,” explains Bold. “Employers are well used to the idea of investing in support services such as mental health first aiders and counselling helplines. Forward-thinking companies could extend this support to financial wellbeing—for example, implementing a “financial wellbeing” policy or referring employees to an IFA for advice.
“A solid support system will help workers to build up their financial resilience, in turn enabling them to focus on their work—which will hopefully lead to career progression to further help them financially,” continues Bold. “Opportunities to discuss financial issues with an employer, such as the recent Pension Awareness Day, can help employees focus on their long-term financial planning and share any concerns they might have about their future.”
The Scottish Widows director also says that employers need to take the lead in supporting their staff with these initiatives, fostering “a culture of support, openness and engagement.”