Financial wellbeing is becoming an active focus in the world of business and HR, but making transformational changes to support employees better can be difficult.
In its broadest sense, financial wellbeing is about having enough money to meet your needs now and in the future; but it's also about having control over your finances so you can make decisions that are right for your life without worrying about the cost.
As an employer, supporting your employees' financial wellbeing makes good business sense. Beyond being the ethical thing to do, it can have a dramatic impact on employee engagement, retention, and productivity; hard benefits that can be tracked and
The facts speak for themselves:
52% of Brits are forced to source extra cash each month to see them through to payday
Employees are looking for a less transactional and more collaborative relationship with their employers
Times are hard right now.
The reality of tackling your finances and making important lifestyle choices can be daunting. Especially when millions of households across the country are facing a cost of living crisis due to soaring energy costs and inflation raising food prices outstripping wage growth.
Without a doubt, households are feeling the squeeze.
New research shines a light on payday spending patterns
The British public are spending money faster than ever before with a new poll of 2,000 UK adults showing that 43% of their disposable income is spent within 24 hours of payday.
The research, carried out by online loan comparison site Moneywise, found that 60% of Brits have less than £100 in their bank account before payday.
The research also shows that 52% of Brits are forced to source extra cash each month to see them through to payday. Paying debts is the biggest payday expense for 1 in 3 Brits.
A quarter of 25–34-year olds spend half their income on payday, with 32% doubling their spending.
These findings demonstrate a worrying trend about how we’re managing our money in the UK today. In fact, the research found that 25–34-year olds use payday loans and short-term instalment borrowers the most— an indication that many young people are struggling to balance their finances and cover their costs from one month to the next.
In short, financial wellbeing is becoming increasingly important in the workplace, whether employers or employees realise it or not.
Should companies be helping their employees?
Understanding that your employees face many of the same cash flow issues that your business does, and taking steps to help them overcome these is vital to support your employees’ wellbeing and a happy workplace culture.
Employees who are in financial hardship may be reluctant to open up about the challenges they face, often absorbing the stress and depression that comes along with this. At work, this can lead to lower productivity levels and increased absenteeism.
However, the symptoms of poor financial wellbeing can be avoided with the right support from employers.
Businesses can provide this support by:
- increasing the frequency of pay to help ease cash flow problems until payday;
- providing employees with an open forum to raise the problems they’re facing; and
- encouraging the use of third-party resources, such as StepChange, to help with problems the business is not set up to support.
Hi is a financial technology company with a purpose-driven commitment to make the world financially stronger by providing access to finance for those that need it most.
For employees, Hi offers more frequent access to earned pay, either weekly via payroll or daily via our card product. With Hi, employees are never more than a week away from being paid, so they don’t have to countdown to the end of the month or look to expensive short-term options such as payday loans.