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How to support employee financial wellbeing

Four out of five people have already been impacted by the cost-of-living crisis, so here are five ways to refine your financial wellbeing policy to reduce anxiety.

Talent Retention

Employees are already feeling the impact of the cost-of-living crisis, so offer financial wellbeing initiatives to boost employee engagement and performance.

The cost-of-living crisis has already seen four out of five (83%) people impacted by rising food, energy and petrol prices. Yet despite the CIPD warning that a quarter of people have experienced performance management issues due to money anxiety, employee financial wellbeing remains the most taboo health and wellbeing issue.

Almost one in two (46%) employees feel uncomfortable discussing their financial wellbeing, according to our recent financial wellbeing research. This puts the onus on employers to offer proactive financial wellbeing initiatives to boost employee engagement and performance.

To help you put in place, or refine, your financial wellbeing policy, we talk to two PAM Wellbeing experts. Elaine Preston, welfare and benefits advisor, explains why millions of employees aren’t claiming state benefits they’re entitled to. While Prakash Solanki, one of our EAP counsellors, gives tips on how to help reduce the emotional strain of money worries.

1. Five ways to boost employee financial wellbeing

One of the easiest ways to boost employee financial wellbeing is to help employees claim all the state benefits they’re entitled to receive. “Over seven million people in the UK aren’t claiming benefits they’re entitled to,” explains Elaine Preston, welfare and benefits advisor, PAM Wellbeing. “Many of these are workers who are healthy and in work so assume they’re not entitled to anything. However Universal Credit is for people both in and out of work.”

She adds, “Many working parents can access help with childcare costs, including higher earners. I come into contact with people on a weekly basis who are struggling because they’re not claiming benefits they’re entitled to. These benefits can be worth hundreds of pounds a month. Single parents, families who are renting and have childcare costs, or have someone in the household who is unwell, might also have circumstances that make them eligible to claim.”

Given how reluctant employees are to open up about money worries, Elaine recommends ensuring your financial wellbeing initiatives include proactively educating employees about claiming state benefits. “Employee Assistance Programmes (EAPs), like PAM Assist, include free access to a welfare and benefits advisor. If you offer this employee benefit, make sure employees know this service exists. Or encourage them to talk to the citizens advice bureau, human resources or occupational health.”

2. Educate employees how to avoid falling into debt

“Lots of employees fall into debt due to circumstances outside of their control,” says Elaine. “They might have been too sick to work and not realised there was a benefit they could claim. Then they may have taken out a credit card to cover basic costs like food and rent. Then another if something else went wrong and they had to repair a car or boiler.”

She adds, “Things can escalate very easily. Make sure employees know what sickness benefits they’re entitled to claim if they go off sick or have to take time off work to care for dependents or an elderly relative. Plus consider putting income protection in place.”

Employee financial wellbeing policies also need to reduce the risk of employees falling into debt in the first place, says Prakash Solanki, EAP advisor. “People leave school not knowing how to manage their finances and end up asking their neighbour or friend what to do, making them the expert. Instead, employers can give people access to actual experts, be this through the EAP, webinars or a wellbeing app. This can teach them how to budget, manage their expenses and put some salary aside each month, so they have a buffer.”

3. Encourage managers to signpost people to counselling

“The number of people calling our counselling helpline for relationship or health worries driven by financial worries is soaring,” says Prakash. “Anxiety is like a sponge soaking up a spillage. Each thing we feel anxious is another thing we have to soak up, until we can’t absorb anymore.”

He adds, “When people are already absorbed with financial worries, it reduces their capacity to take on other pressures. Then even something small can trigger a reaction as people become more tearful or angry in the workplace. That’s when managers need to respond by offering kind enquiry into how the employee is and listening to them with empathy.”

As the employee opens up, and everything comes out, managers shouldn’t try to tell the employee what they should do. “Managers just need to listen,” explains Prakash. “The act of listening is very important. It makes the employee feel heard and builds trust so they’re more likely to respond to other suggestions. Then if the manager says we have this counselling service you can speak to, the employee is more likely to use it.”

4. Get employees to focus on what they can control

Lots of people are being emotionally impacted by the increased cost of living. “Many people are finding they can’t afford their basic needs, such as shelter, food and warmth. People feel life is a drudge, just an existence. They feel useless they can’t afford the basic necessities fo life for their families,” explains Elaine.

She adds, “Others know increases are coming but aren’t aware how much that will be yet. So it’s essential they start trying to put their finances in order. Everyone needs to take stock of their income and fixed outgoings to see if they have expenses they can eliminate or reduce. Then look at their disposable income to see what they can put aside to service debt or start saving. Just that act of taking control can be very reassuring and empowering.”

Prakash agrees, “Most people know what they need to do to improve their situation but can’t think rationally or creatively when they feel overwhelmed. There are often a few steps they can take that will make a big difference, but we have two internal fires: a fire of ‘influence and control’ and a fire of ‘anxiety and uncertainty’. When you focus on anxiety, that gets fuel to grow bigger while the other fires get starved and starts to reduce. So we have to focus on what we can control to be able to ask ourselves: ‘What can I do to improve my situation?’”

5. Normalise financial anxiety

Financial wellbeing policies also need to look at normalising financial anxiety. An employee who can’t afford to go on a team lunch should feel okay admitting this. This will also help managers to become more mindful of employee wellbeing.

“It’s important not to make any assumptions about anyone,” says Prakash. “Even people on very good salaries will be affected. They might not be used to having to budget and will most likely have committed themselves to more expensive outgoings, such as a bigger mortgage.”

Elaine adds, “Normalising financial worries will also make people feel safe sharing tips and advice with each other. It could be an article they read about reducing energy costs, tips for reducing food bills or help they got from the EAP. The more people feel able to talk about the challenges ahead, the less likely they are to become overwhelmed by them.”

Employee Financial Wellbeing Services

PAM Wellbeing offers several financial wellbeing services to help employees and managers navigate the cost-of-living crisis. Including:

  • Employee Assistance Programme, featuring counselling and debt helplines
  • Specialist welfare and benefits support, also accessible via the EAP
  • Financial wellbeing webinars and workshops for employees
  • Mental health training for mangers to have mental health conversations
  • Face-to-face counselling and CBT training for employee in need of extra support

Why not set up a free consultation to discuss your needs? Just call 08081 968 186 or email info@pamwellbeing.co.uk.

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