As a nation, we are now facing a sad but real statistic from Money & Pension Service: Almost 9 million people in the UK worry about money every day. As the cost of living keeps rising across the country, we explore how employers and HR departments can help employees’ financial well-being through the cost of living crisis.
Helping employees with financial well-being. Why should you?
A recent report shows that 53% of people don’t believe their employer cares about helping employees’ financial well-being. Another sad statistic to kick off this blog (it gets more positive towards the end, we promise).
Whether or not this is true, the reasons why employers should be helping employees with their financial well-being goes way beyond what many see as a “goodwill act”.
According to HR magazine, one in five people has experienced being less productive at work due to lack of sleep caused by money issues. A study performed by the European Journal of Public Health also found that poor physical functioning was significantly higher among respondents having current economic difficulties.
A report by EY from 2020 helps us put this into perspective and, as is EY’s speciality, figures:
- They found that almost 20% of employee turnover is attributed to financial stress.
- They estimate the cost of this problem for UK and US employers is a combined at a whopping $300bn per year.
TLDR: Financial stress may be making your employees sick, tired, stressed, depressed, sleepless and too exhausted to work.
Helping employees with their financial wellbeing is often about giving them more control of their money. Look into an Earned Wage Acces solution, like Orka Pay.
How can you help?
These figures sound overwhelming. But, there are easy steps and measures you can put in place to make your employees more financially secure, happier and more in control of their finances.
Wages
Starting with the obvious.
Although we have previously called for an increase in wages for essential workers, financial wellbeing isn’t simply solved just by increasing wages.
But it’s a start. Re-evaluating the cost of talent in your team could save you money down the line on recruitment and training.
A great place to start is by committing to pay the Real Living Wage, a pledge Orka has taken in terms of our Head Office staff, and hope to influence our clients, partners and other businesses to do the same.
The fact of the matter is that no benefit you can ever offer will be able to make up for underpaying your employees.
Mic drop.
Knowledge
How you educate yourself and others in your business to identify money struggles in employees is important.
As an employer, you’re in a unique position to identify issues by observing changes in performance and behaviour. Pay attention to things like:
- Rising absenteeism
- More sick days being taken
- Missing effort
- Increasing or unusual mistakes
- General absentmindedness
All these behaviours are indicators of financial struggles, and key to identifying people at risk sooner.
Training line managers and assigning a team of mental health first-aiders across the business opens up the doors for employees to reach out about their worries.
This is often the first and the most difficult step in seeking help and breaking a bad cycle.
Education & Resoures
Orientate yourself about free and trustworthy resources you can share or direct employees to. This will help employees at risk avoid debt counselling agencies and dangerous ways of getting money quickly, such as payday loans and illegitimate lenders.
Here are just some of the resources available:
Orka Pay is an Earned Wage Access product that helps employees access wages they’ve already earned. It’s a financial security net for your employees, and built to be a safe, reliable and a cheaper option compared to credit, payday loans and buy-now-pay-later schemes. Learn more about Orka Pay today:
The right equipment
Ofcom says nearly 36% of primary school children do not have access to suitable devices to do their homework. Let alone a stable internet connection.
This is part of a phenomenon called digital exclusion and disproportionately affects low-income and vulnerable households. Not having access to suitable devices and connections can leave employees falling behind on personal admin and overall unable to access the resources they need to stay on top of their finances.
In partnership with your IT department, consider donating or coordinating a borrowing scheme for any unused or old equipment that is still functional.
Opening up Head Offices or admin areas for employees to use company equipment or internet connection may seem like a small gesture, but it could be incredibly helpful for individuals.
Benefits
Review and market your existing benefits. What do people use, and how do they use it?
Regularly reviewing benefits, and determining what helps people, is key to supporting employee retention, employee happiness and financial well-being. Every company should have a financial well-being strategy, and finding creative ways to help your staff without it costing your business is becoming easier by the day.
Looking into benefits that give your employees more financial know-how and freedom and efficiently marketing these solutions could really benefit your workforce.
If you think your employees might benefit from having flexible access to their wages, have a look at how Orka Pay is helping employees across the UK to stay in control of their finances.
If you can, pick up overtime shifts to cover large withdrawals
“If you’re going to use Orka Pay, try to put in some overtime to cover what you’re using. Planning and budgeting for this is key to keeping in control of your money.”
– Roz, Head of HR at Whistlepunks
Use it as a safety net
“Try not to use it on the regular. It’s there as a safety net, and that’s how I try and look at it. It’s not something you should just go and get money when you want it because it’s coming out of your wages as the end of the month, so use it in emergencies only.”
Vicky, Instructor at Whistlepunks
Limit usage
“Don’t overuse it, and keep in mind that anything you withdraw will come out of your wages at the end of the month. Try to use it only for essential things and bills.”
– Jamie, Sous Chef at Little Ships Restaurant
Use it to track your earnings
“The app is user-friendly. You’ll see how much money has been paid into your account and calculate exactly how much withdrawal fees will cost you.”
– Martin, Instructor at Whistlepunks
Monitor usage
“Paying attention to the frequency of use, how often you withdraw and reaching out if you have further trouble with money is important.”
– Tim, Operations Manager at Little Ships Restaurant
