Imagine a caring employer. Keen to help and ensure staff enjoy emotional and financial wellbeing – so that they are happy in work and just as importantly out of it.
The employer decides to implement a positive financial wellbeing benefits policy, and has stumped up the resources and money to make sure the service is fully embedded into the culture of the company.
But then the employer and the excited HR department get a little flummoxed. They understandably think they are doing something good, something worthwhile, but they get some feedback which causes them to pause.
That feedback is framed within a pointed question.
“Instead of spending money on planning and implementing a financial wellbeing policy that some people may just ignore, why not just give me and my colleagues a pay rise? That will certainly lead to me feeling a bit better!”
A fair point one might think.
Quite often, when faced with the prospect of being invited to take part in a financial wellbeing programme at work, staff respond with ‘surely it’s about just paying people more?’
No, that’s not the case.
Of course we would all like to be paid well – and in the workplace we often equate self-worth with financial worth, so receiving a raise would have an immediate effect on how you feel. From an employee’s point of view, a pay rise remains one of the clearest forms of measurement and ‘doing well’. But is it ‘the be all and end all?’
Issues surrounding financial wellbeing, financial freedom, financial happiness, whatever phrase or label you want to put on it, spread right across the varying age groups. They spread right across the earning spectrum as well. Just by getting more money in your pay packet doesn’t necessarily lead you to being more financially aware, or happy with your life.
What if you spend that extra money, without thinking about the consequences, or pondering what you and your loved ones might need in the future?
The more one partner earns, the less reliance there is on the other, who may work part-time or full-time on a lower wage. So what if something happens to that main breadwinner, the person who has been given the pay rise? What if they were suddenly unable to continue working that better paid job? The impact on their family can be significant. It bears remembering that with money, it is never just about the individual themselves, but about their wider circle. More money doesn’t necessarily fix everything.
Making staff feel valued goes a long way to engaging with them – and an engaged workforce is the backbone of a productive business.
And there are ways to make your staff feel valued even if you can’t afford to offer pay rises across the board. The first way is to be open and honest – and explain the reasons why the company cannot just go out and deliver sweeping pay rises across the board. Be inclusive with your employees, not exclusive! Transparency matters when it comes to managing your employees’ expectations. Don’t have uncertainty in the workplace.
Yes it can hurt, both to pocket and feelings, when a pay rise isn’t on the cards, so an explanation, and perhaps help in other areas (like the offer of financial guidance) could go quite a long way to softening the blow, and maintaining trust.
It is noticeable that eight in 10 employees feel that the Covid-19 pandemic has had a negative impact on their employer’s finances, yet almost half of organisations do not have a financial wellbeing programme in place.
In Lifetime’s view everyone should have clear, easy access to financial education to help their wellbeing. And placing finances into context with all other aspects of a person’s life is vital.
Employees quite often focus on their short-term needs. The time has come to flip that – and encourage employees to consider their longer-term financial goals.
Money issues can leave us feeling incredibly vulnerable, so it is crucial to offer a financial wellbeing and guidance programme in a safe environment, and in a supportive way. Financial health can impact other areas of our lives, such as stress. Having the tools to establish their own financial plan can help take pressure off an employee’s daily life.