the moral and business case for employee financial wellbeing

the moral & business case for employee financial wellbeing

Despite the financial hardship wrought by COVID-19, half of employers (49%) don’t have a financial wellbeing policy, according to the latest Reward Management Survey from the CIPD, the professional body for HR and people development.

The CIPD’s survey (which 420 employers responded to) finds that:

• 12% of employers have introduced, or plan to introduce, a financial wellbeing policy in direct response to the pandemic (29% already had one)

• 19% are planning or considering becoming an accredited Living Wage

Foundation employer (a further 18% of employers are already accredited and another 18% already pay the ‘Real Living Wage’ without being accredited)

• 24% of employers have explored how the pandemic has impacted their employees’ financial wellbeing, so they’re better able to identify the right kind of support. Another 18% plan to do so by the end of

March 2021

• Nearly a third (30%) of employers say the pandemic and economic crisis has prompted them to consider how fair their pay and benefits are. As well as affecting an individual’s health and wellbeing, money and debt worries can impact performance at work, which can have knock-on implications for productivity and the bottom line.

However, the report suggests some employers don’t recognise the strong business case for having a financial wellbeing policy.

The most common reason given by employers for not having a financial wellbeing policy was that senior management don’t see it as a priority right now (49%). Other reasons given were:

• 27% said that senior management see the need for a financial wellbeing policy, but don’t have the time, money or expertise to create it

• 21% said they weren’t sure employees would want such a policy (this decreases to 11% for those who’ve asked their employees what impact the pandemic has had on their financial wellbeing) • 20% aren’t sure it would contribute to employees’ wellbeing

• 19% don’t trust a policy would improve organisational performance.

Charles Cotton, senior performance and reward adviser at the CIPD, said:

“The pandemic has, unfortunately, hit many people’s finances hard, with many losing their jobs and others seeing their income fall. This has no doubt focused many employers’ minds on fairness and in-work poverty – and it’s good to see a number of them taking steps to protect people’s financial wellbeing during the pandemic.

“And whilst we fully acknowledge how tough it is for businesses right now, with many just focusing on surviving, we think there’s a strong case for employers to be doing more to support their people’s financial wellbeing. Even light-touch steps, such as signposting to independent money and debt advice, can start to make a difference.

“It should also be said that every employee stands to benefit from having better access to financial wellbeing support, particularly at key life stages, such as when they are starting out, becoming a parent or retiring.”

Further findings from the report include:

• A quarter of employers (25%) will have revised how much they have spent on employee pay by March 2021. Of these, 50% will reduce pay and 25% will increase it.

• Only 7% of organisations are changing pay to reflect home working or have plans to do so. A quarter do not intend to do so, while 16% are keeping the issue under review.

• A quarter (26%) of organisations intend to change the amount spent on employee benefits this year. Of these, 44% are increasing spend and 40% are decreasing spend.

• 19% of organisations are making changes to their reward practices in response to the Black Lives

Matters protests that took place last summer. Those that are taking action are concentrated in the public and voluntary sectors.

The CIPD recommends a financial wellbeing policy should include:

• Signposting to financial wellbeing advice, such as the resources available from the Money and

Pensions Service (which small employers can do easily).

• Targeted financial education support at key moments in working lives, for example ahead of maternity leave • Revising benefits packages to include finance friendly initiatives, like giving employees the option to choose how often they’re paid

• Implementing flexible working policies so employees with caring responsibilities can balance working enough hours to comfortably pay their bills

• Giving people security over their hours and helping them to progress into higher-paid roles

• Committing, where possible, to paying at least the Real Living Wage.

If you feel your organisation needs help in supporting employees then advo hr is here to help, email advohr@ advogroup.co.uk to start a conversation.