Despite the financial hardship brought about by COVID-19, half of employers (49%) in the UK don’t have a financial wellbeing policy, a new report revealed.
“As well as affecting an individual’s health and wellbeing, money and debt worries can impact people’s performance at work, which can have knock-on implications for their employer’s productivity and bottom line,” said HR body Chartered Institute of Personnel and Development (CIPD).
However, it said its survey of 420 employers suggest some don’t recognise the strong business case for having a financial wellbeing policy.
Such a policy can include money and debt guidance, offering access to low-interest loans and running pension workshops.
The latest Reward Management Survey from HR professional CIPD of 420 employers found that the most common reason given by employers for not having a financial wellbeing policy was that senior management don’t see it as a priority right now (49%).
Some 27% said that senior management see the need for a financial wellbeing policy, but don’t have the time, money or expertise to create it
Around 21% said they weren’t sure employees would want such a policy; 20% aren’t sure it would contribute to their wellbeing and 19% said they didn't trust a policy would improve their organisation’s performance.
The retail, hospitality, catering, leisure and cleaning sectors were most likely to report that their senior management don’t see a financial wellbeing policy as a priority (64%). Employers in these sectors were also most likely to say they thought their employees’ finances had been adversely affected by the pandemic.
On the flip side, 30% of respondents said the pandemic prompted them to consider how fair their pay and benefits are.
Some 12% of employers have introduced, or plan to introduce, a financial wellbeing policy in direct response to the pandemic, with 29% saying they already had one.
Around 19% of respondents said are planning or considering becoming an accredited Living Wage Foundation employer.
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While the CIPD welcomed these moves, it said it “wants every large employer to have a financial wellbeing policy which feeds into their wider wellbeing strategy and, ideally, put a budget behind it.”
The body is also encouraging employers to act quickly, since low-income workers have suffered the sharpest drop in earnings during the pandemic, and the Financial Conduct Authority has said a quarter of the UK adult population now have low financial resilience.
Charles Cotton, senior performance and reward adviser at the CIPD, said: "We’ve seen many employers really step up to the plate when it comes to supporting their employees’ mental wellbeing during this crisis, and we’d like to see the same attention given to their employees’ financial wellbeing.
“It should also be said that every employee stands to benefit from having better access to financial wellbeing support, particularly at key life stages, such as when they are starting out, becoming a parent or retiring."
The CIPD’s recommendations include targeted financial education support at key moments in working lives, for example ahead of maternity leave , and revising benefits packages to include finance-friendly initiatives, like giving employees the option to choose how often they’re paid.
Last month a 10-year strategy to improve the UK’s financial wellbeing has been launched today by the government-backed Money and Pensions Service (MaPS).
The MaPS found that 11.5 million people in the UK have less than £100 ($130) in savings — the strategy aims to combat this and create a “nation of savers.”
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