Financial anxieties are rife across the UK. Despite moderate improvements in macroeconomic indicators, people everywhere continue to contend with the high cost of living. Yet too many lack the basic financial literacy required to manage their finances. One-quarter of UK adults have little or no confidence in their ability to manage their financial affairs, according to research by the Financial Conduct Authority.
This is bad news for businesses, as money worries often lead to absenteeism and disengagement in the workplace. Business leaders acknowledge this, too, with four in 10 (42%) executives saying that financial stress prevents employees from doing their best work, according to a survey by Dayforce, an HR firm.
To address this problem, some employers are providing staff with enhanced financial support, such as financial education, training on salary negotiations, early access to wages and employee share schemes. Research suggests such initiatives are worth the effort, and many employers offering such benefits claim to have achieved measurable results. For instance, a study by the Employee Benefit Research Institute found a 25% increase in productivity levels among employees that took part in financial-wellbeing programmes; and PwC reported a 25% reduction in turnover among participants in their financial-wellness initiatives.
Proactive finance leaders therefore have a strong case for the inclusion of financial-wellbeing perks in their firm’s benefits package. While the composition of employee benefits packages is typically the purview of HR, strong support from the finance team is invaluable for firms planning to introduce financial-wellbeing perks.
“Financial wellbeing isn’t just an HR issue, it’s a business issue,” says Simon Puryer, executive director of payroll at Lace Partners, a consultancy. He adds that finance chiefs, as both financial stewards and leaders responsible for maintaining organisational resilience, play a unique role in assessing the impact of financial stress on productivity, engagement and talent retention.
The critical role CFOs play
Finance teams can support employee financial wellbeing in several ways. According to Puryer, the payroll function can provide valuable insights into financial wellness that are often overlooked. Payroll data contain many indicators of financial stress, including frequent overtime or requests for wage advances. Finance and HR leaders can use insights from this data to design targeted interventions through education workshops or direct financial support.
“Payroll is one of the largest operating costs, so finance chiefs have a unique opportunity to influence how remuneration and benefits are structured to support employees while maintaining financial stability,” Puryer explains. “CFOs should be asking: how can payroll and benefits be structured to alleviate financial stress, enhance retention and ultimately drive business performance?”
When we discuss key terms like gross margin, employees now recognise the actions that influence these figures
Some employers offer direct financial assistance through, for instance, on-demand pay platforms, which enable workers to access earned wages ahead of payday. Here, it’s the responsibility of the finance leader to communicate the risks and benefits of such schemes to the workforce, and drive engagement.
Others firms are providing financial guidance through budgeting workshops and debt-management support. For Darren Mercieca, managing director at MHR Audit, the goal of such courses is not just to teach theory, but to empower people to take real action. A former CFO, Mercieca runs a monthly after-work learning session for employees seeking to improve their money-management skills. “Employees who once saved nothing are now putting aside 10% to 20% of their pay cheque,” he says. “A few have completely restructured their approach to money, cutting unnecessary expenses and setting clear financial goals.”
Andrew Collis, CFO at Moneypenny, a customer-call answering service, also teaches a financial wellbeing module for his firm’s staff. This covers topics such as mortgages and wealth management, and includes one-to-one check-ins and informative lunch-and-learn sessions.
Collis also launched the Penny Perks platform, which offers discounts at some retailers and local businesses and interest-free loans of up to £2,500 for employees who have passed their probation. “CFOs are in the perfect position to drive financial-wellbeing initiatives – balancing cost-effective benefits with real value for employees,” he says. “Small but meaningful perks, such as free parking, breakfast, tea and coffee, subsidised lunches and free fruit, are also important.”
The business case for a financially literate workforce
According to Colin McLellan, CFO at CreateFuture, a software company, investing in employee financial wellbeing is not just a feel-good initiative – it’s a strategic imperative.
McLellan recently introduced a micro-learning series called Business Acumen, in a bid to strengthen financial literacy across his organisation. Composed of six bite-sized videos, the workshop aims to improve employees’ understanding of how the business operates.
Employees who once saved nothing are now putting aside 10% to 20% of their pay cheque
The initiative serves three key purposes, he explains. First, it provides everyone with a solid grasp of the basics of the business: an explanation of how the firm makes money, profit and loss terminology and the difference between profit and cash.
Second, the programme helps employees connect the dots between financial outcomes and day-to-day decisions, enabling a deeper understanding of company-performance updates. And, lastly, it encourages everyone in the organisation to identify business opportunities and risks.
“When we discuss key terms, such as gross margin, employees not only grasp what we’re talking about but recognise what actions influence these figures,” McLellan explains. “This shouldn’t be the responsibility of just commercial and leadership teams. We have very smart people working throughout our company and everyone can add value.”
The course is evolving based on engagement levels, viewer feedback and emerging questions from the workforce. As to whether it can help boost the bottom line, McLellan is optimistic: “With only the second video released so far, it’s early days, but the response is already shaping the way we communicate financial performance across the business.”
Financial wellbeing is more than just about paying employees and providing a few benefits. It is about creating financial security and literacy across the workforce, driving focus, productivity and loyalty. Finance leaders who fail to recognise this are missing a trick.
Financial anxieties are rife across the UK. Despite moderate improvements in macroeconomic indicators, people everywhere continue to contend with the high cost of living. Yet too many lack the basic financial literacy required to manage their finances. One-quarter of UK adults have little or no confidence in their ability to manage their financial affairs, according to research by the Financial Conduct Authority.
This is bad news for businesses, as money worries often lead to absenteeism and disengagement in the workplace. Business leaders acknowledge this, too, with four in 10 (42%) executives saying that financial stress prevents employees from doing their best work, according to a survey by Dayforce, an HR firm.
To address this problem, some employers are providing staff with enhanced financial support, such as financial education, training on salary negotiations, early access to wages and employee share schemes. Research suggests such initiatives are worth the effort, and many employers offering such benefits claim to have achieved measurable results. For instance, a study by the Employee Benefit Research Institute found a 25% increase in productivity levels among employees that took part in financial-wellbeing programmes; and PwC reported a 25% reduction in turnover among participants in their financial-wellness initiatives.
