Member Article

How can businesses support staff through financial difficulty?

Karim Peer, CEO of Balmoral Financial

According to thinktank The Resolution Foundation, the recently introduced National Living Wage is set to benefit up to one in three workers. This will certainly be seen by many as a positive movement as not only will it ensure that Brits have more money in their back pocket, it will also be a great way to keep UK employees happy and recruit new talent. In short, the new regulations could make a huge difference to the financial wellbeing and overall quality of life for many employees and businesses across the UK.

Providing employees with a decent salary is a step in the right direction to creating a business that people want to work for, retaining staff and attracting top talent. On the other hand, having more in one’s pay packet, doesn’t always necessarily result in extra expendable cashflow for employees and it certainly doesn’t result in better management of that cashflow.

As a result, apart from providing the National Living Wage to its employees, what can businesses do to protect and nurture the financial wellbeing of their staff and also ensure they stay committed and loyal to the company in the long run?

Fortunately there are plenty of ways that employers can support their staff and help them to improve their financial position and financial education, whilst also simultaneously building on their sense of company loyalty. Below are four top tips to help employees with their financial position:

The first step is to offer individuals the opportunity to have an open and honest conversation about their financial situation. Do not force your employees, or potential employees, to talk about the financial challenges they face, but rather let it be known that there are various options available to them. If someone does choose to seek help, reassure them that transparency, and of course discretion, during this conversation is key. You can then work with them to come up with a practical solution that best fits their needs.

When speaking to individual members of staff, try to withhold any preconceptions you might have about the problems they may be facing. It’s not a bad idea to consider the stage of life, or lifecycle, they might be in too. For example, a young man who is just starting his career might have completely different financial problems to a single mother who needs to provide for her two children. Try not to revert to stereotypes, or worse still, ignore the unique situation of the person you are speaking to. Take the time to understand every aspect of their life and the challenges they may face in the future. You can then understand how you are best placed to support them and what benefits package will work best for them.

Once you have established that an employee is facing a difficult financial situation, think about how you can help to educate them about how to improve it. Technology is often key to this. There are many services that enable quick and easy access to bank account information and that can track a person’s spending. If a person is able to check this information regularly throughout the day, they will have a better chance of managing their spending and finances in a responsible way. As an employer, encourage your staff to research their options or look at providing access to a service as part of your company’s benefits package. Financial education is a fantastic benefit to offer staff and can be a great addition to a training package.

When considering your company benefits package, it’s a good idea to examine your offering on a regular basis. Is it flexible to the needs of people in different lifecycles or financial situations? Does it offer a route out of debt for those who are struggling to make ends meet? Salary deducted loans, and savings trackers, can be used to help employees tackle their financial problems with the support of their employer. If employees are taking steps to clear or consolidate their debt with the help and knowledge of their employer, existing staff are likely to feel safer and cared for, thereby increasing their sense of loyalty and improving overall retention.

Without doubt, the introduction of the National Living Wage is brilliant news for employees’ pay packets, but companies still need to take other steps in order to provide staff with routes to financial security through conversation, education, technology and alternative benefits packages. Not only will this help employees to improve their financial situation, it will also greatly increase their motivation and sense of loyalty at work, benefitting companies across the UK.

This was posted in Bdaily's Members' News section by Balmoral Financial .