Financial worries affect staff in most workforces. As a result, many employees will benefit from financial guidance, education and advice. Two experts debate how organisations can adopt a practical approach to delivering this

Payroll, pension s and Employee Assistance Programmes (EAPs) can be rich source s of information about financial wellbeing trends in the workplace - but very few people in our survey are using these. What are the barrier s to making the most of this data, and how can they be overcome?

Jonathan Watts-Lay

Jonathan Watts-Lay

JWL: When we start working with a company, one of the first things that we do is use data, for example from the HR and benefits database to help us segment the workforce and better understand their needs. Data really is the starting point, and it’s difficult to put effective financial education in place without it. Sometimes there are constraints, and the information available won’t cover everything, but it is crucial.

Sources of data might be systems such as an EAP which can give some valuable anonymised pointers about financial worries in the workplace. Provided your systems providers offer good quality management information tools, there should be few barriers to using these sources of information. That can then be combined with information that you’ve proactively asked your employees about, to give a richer picture.

ZDT: Payroll data is a rich source of information that can help you to get to grips with your workforce demographics. That can then be used to help you understand what you can do to help them. For example, you can identify older workers who might need more support with retirement planning. There can be some challenges involved – for example, if your payroll is based in different locations around the world, it can be difficult to get a joined-up view and using unique identifiers to collate the data can sometimes be hard to do.

Zoe Denny-Thomas

Zoe Denny-Thomas, head of member services, Proshare (ZDT)

Good communication within the HR team, sharing best practice and agreeing central points for collecting information together can all be helpful in overcoming those challenges. Generally, it is in the best interest of the employer to be able to use this information effectively but coordinating the work involved in extracting data is important. Information from other sources, such as Employee Assistance Programmes, can also be very useful. We’ve found that many of the advisers that we work with use this type of data to help build wellbeing programmes with employees.

While auto-enrolment has meant all employers will now offer a pension, use of other savings schemes such as Save As You Earn are still relatively low. How can employees be encouraged to use them?

JWL: Encouraging employees to think about short, medium and long-term savings goals can really help with this. In the short term, someone might be interested in saving for a car or a wedding, for example. In the medium term, their focus might be on school fees or a home deposit over a five to 15 year period.

Longer term savings are typically about retirement savings. Matching those goals up to what’s on offer in the workplace is the next step. For example, putting money into a Save As You Earn (SAYE) scheme can help fulfill short-term goals. If there’s a Share Incentive Plan, that can be a beneficial way of saving for the long term.

While it’s tempting to encourage people to divide up what they can save each month and allocate a certain amount to short, medium and long-term goals, that might not work for everyone’s priorities. Making sure staff have really thought about what they want to achieve and that they are using the right savings options to achieve that is really important.

Helping employees to reassess their priorities once they’ve achieved a savings goal will help to make sure that they stay on track for medium and long-term goals as well as the short term.

ZDT: We’ve recently carried out research into why employees don’t take up SAYE plans and similar. We found that less than half – 40% – said that it was because they couldn’t afford it, so it’s not always about financial constraints. Often it’s about communication – using the example of SAYE, we found that if employers did more to communicate the minimum contribution level, it made this type of saving feel more accessible.

Effective communication is another key component. We run an annual awards ceremony, which includes recognition of how well employers communicate with their staff about share saving. We’ve seen some really innovative approaches, including use of ‘champions’ who become the go-to person in a company to approach with any questions.

Sometimes that’s a person in payroll, but it could also be someone from the wider workforce. Others have made great use of digital and social media – creating memes or using webchats and webinars. There are so many innovative approaches that companies can take to getting information across. Benefit design is another consideration. That could be making sure that appropriate benefits are on offer to staff. It can be about broader legislation too. For example, we’ve been lobbying the government to refresh SAYE and Share Incentive Plan design to make them more flexible.

How can employers be encouraged to offer financial education, guidance or advice?

JWL: I think more companies are doing this, but it is larger businesses, rather than SMEs. Sometimes businesses of all sizes don’t think this is their problem – but there is increasing recognition that worrying about money affects day-to-day productivity as well as long-term plans such as retirement.

We are seeing much more interest in supporting the 50-plus age group with financial education, guidance, and advice as employers are beginning to become more concerned about their staff’s ability to retire and an ageing workforce.

However, planning for retirement is something that can start much earlier as well. Helping employees to see how seemingly unconnected activities are interlinked, such as shopping around for insurance and utility providers and paying savings made into a pension, is a key part of good financial education. Spending less on everyday bills frees up money to save into a pension. Then, taking advantage of matching pension contributions from the employer and associated tax relief could mean that small changes to everyday money management add up to considerably better savings in the long term.

ZDT: Sometimes employers don’t want to offer information to employees, because they feel there may be some liability on their part However, those views are now changing. Financial worries are very clearly affecting the workforce, and businesses are now realising that they need to do something about this. There are many approaches to financial education to suit different needs.

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This article is featured in Reward’s Wellbeing in the Workplace research. Find it here