Employee Benefits: Four ways employers can build financial resilience into their strategy
For the financial lives of working people, sustained reduction in wages and changing regulations has meant that the outbreak has really challenged their financial resilience. Businesses looking for a speedy recovery need to provide direct and immediate employee benefits to help their workers rebuild and help staff on their journey to financial resilience.
What does financial resilience mean?
Financial resilience is the ability to withstand and recover from temporary financial hardship due to a sudden fall in income or an unavoidable rise in expenditure.
Why should your employee benefits strategy include financial resilience tools?
It’s simple really, a workforce without money worries is a healthy and happy workforce that are going to have less on their minds and be more focused on their work. Over half the people surveyed in the PWC 8th Annual Financial Wellbeing Report said that financial worries were the biggest stress factor in their lives.
82% of Wagestream users feel more positive about their employer for providing financial resilience tools as a part of their employee benefits.
We’re going to look at the four steps for financial resilience
- Helping with the here and now
- Providing liquidity
- Building financial knowledge
- Encouraging a savings habit for the future
Helping with the here and now
After months of furlough and reduced wages, your staff need help with understanding where they are financially and what their next steps are.
The best way to do this is providing access to helpful budgeting tools that not only provide an overview of expenditure but also a real-time of view of earnings so that they can plan ahead.
Tools with built-in payment reminders for recurring bills can help colleagues to stay a float.
Months of uncertainty around what employees are going to get paid and when means that this kind of support can be hugely impactful.
Earned wage access
With 19% of people saying they turned to credit cards to cover necessary items in the first four weeks of lockdown*, employers need to provide better liquidity through access to earned wage access schemes to help workers avoid negative cycles of debt.
*Standard Life Foundation, Coronavirus Financial Impact Tracker, April 2020
Earned wage access or earned salary access schemes (ESAS) quite simply allow employees to access their wages as they’re earned and avoid unnecessary debt. At Wagestream, we only ever provide access to earned wages, although some other schemes may vary so be sure to understand the full offering.
Earned wage access with Wagestream has already helped 42% of users avoid turning to payday lenders, 37% avoid going into an overdraft, and 65% cover an unexpected bill with their own wages.
Building financial knowledge
Empowering employees to make the right decisions when it comes to their money should only be done through independent financial guidance. An unbiased partner can help to protect the employer and help employees feel more confident about the quality of information they’re receiving.
Gamified education courses are a great way to get staff engaged with financial education resources when working remotely.
For more information on specific financial support available throughout the crisis, click here.
Encouraging a savings habit for the future
After you’ve helped your staff back on their feet, you need to promote good savings habits so that they can start to build a financial buffer. Helping staff create a financial buffer means that they have the ability to weather any financial storms of the future.
Incentivised and automatic savings direct from salary are a great way to make it simple and help employees save in a manageable and effective way.
For more information on how to promote good savings habits, click here.
To build financial resilience into your employee benefits strategy, get in touch.