Aon, a leading global professional services firm providing a broad range of risk, retirement and health solutions (NYSE: AON), says that recent research has shown that 62.5% of employers says it is their responsibility to support staff with financial wellbeing. A further 98% wish to improve employee engagement in the subject. In response to the Aon 2019 Benefits & Trends Survey figures, leading advisers at Aon have developed seven steps for employers to take to support employee financial wellbeing.
Martin Parish, a financial wellbeing specialist at Aon, said:
“The issues of poor financial wellbeing are increasingly well-known. Among other problems, 46% of people in problem debt also have a mental health problem1. Furthermore, 22% of employees have said their financial situation causes them stress and negatively impacts their productivity2.
“Poor financial health will also have an impact on people’s ability to retire. Aon’s DC and Financial Wellbeing Member Survey showed that 59% of people feel they are not saving enough for the future, and 37% approaching retirement do not have a plan. A workforce with employees who cannot afford to retire is not just an issue for those employees; it can also impact career progression and may increase the number of employees with poor health – and therefore may increase absence rates.”
Supporting financial wellbeing does not have to be complicated for employers and Aon has broken the subject down into seven key aspects to consider in ‘How to support financial wellbeing: Seven secrets to success’. Aon advises:
- Adopt a holistic approach. Don’t get caught in the trap of thinking that employer support should only cover financial aspects related to the workplace, such as pensions, workplace ISAs, bonuses etc. When it comes to supporting Financial Wellbeing, employers need to think holistically and consider personal financial circumstances too. Initially, look at where you can make an impact.
- Use data. It’s important to assess the current strategy (if there is one) and levels of uptake and engagement from current data. Then use surveys and focus groups to ask what support employees would like – bearing in mind people may not want to discuss some financial issues in a focus group. Also, benchmark your financial wellbeing activities against your competitors.
- Focus on a framework. There is a lot of ground to cover so break it down to have the best impact on engagement. Aon recommends the ‘4 P’s’ framework – Prepare – build financial knowledge, Plan – Build a short, medium and long-term financial plan, Protect – Prepare for the unexpected and Preserve – Understand the financial needs, perhaps retirement transitioning and managing an existing pension fund.
- Be practical and relatable. By using the 4 P’s framework, it’s possible to focus on the key employee areas to make a positive impact, such as budgeting, financial goals, retirement planning and preventative action against worse-case events. Use real-world examples to make your messages have more impact.
- Use Technology. Technology gives employers the opportunity to enhance their financial wellbeing strategy. Real-time information, holistic overview, data-driven insights, cross-generational appeal and improved user experience support both employer and employee.
- Engage Champions. Peer to peer champions can be a very effective way of communicating financial wellbeing support. It’s ideal when employees are excited about a financial wellbeing programme and feel they have 360 support. Adopt an open culture about financial awareness.
- Take an agile approach. A financial wellbeing strategy doesn’t need to be rolled-out in one polished block, so adopting an agile approach enables the ability to make improvements or change direction with minimal impact to upcoming plans and budget.
Martin Parish concludes:
“Financial wellbeing is a key component of an individual’s overall wellbeing, which also includes physical, mental and social wellbeing. It goes beyond just having enough money in the bank – it includes good financial management and having the appropriate tools to facilitate financial decisions. It’s the peace of mind that comes with knowing there is enough money for both present and future financial commitments.
“As one of the core wellbeing pillars, employee financial wellbeing is a growing concern for businesses. Financial Conduct Authority figures show that 67% of employees are currently struggling financially3, which can have a detrimental impact on both their own health and business performance. It’s no wonder so many employers want to support their employees.”
1Money and Mental Health Policy Institute: https://www.moneyandmentalhealth.org/money-and-mental-health-facts/