In times of uncertainty, such as the current cost of living crisis, it’s no surprise that many people are feeling financial pressure.
Indeed, a new report published by Professional Paraplanner has found that financial stress in the workforce costs UK businesses £10.3 billion in lost workdays every year.
Undue financial stress could also result in lower productivity, presenteeism, and poor staff retention, all of which could negatively affect both business performance and employee wellbeing.
So, what support could you, as a business owner, put in place to create a work environment that fosters financial wellbeing?
Offer a salary sacrifice scheme
A salary sacrifice scheme is an agreement between you and your employee, where they “sacrifice” a portion of their salary in exchange for other, non-cash benefits.
There are lots of salary sacrifice options you could offer, from company cars and childcare vouchers to gym membership and a Cycle to Work scheme.
One popular salary sacrifice option is matched or enhanced pension contributions. Here, your employee would accept a reduced salary in exchange for increased employer contributions to their pension. This could help your employees plan for their future and potentially reduce any stress they feel about their long-term financial security.
Whatever type of salary sacrifice scheme you choose to provide, both your business and your employees could benefit.
Your employees may gain access to products and services they might not otherwise be able to afford while also reducing their taxable income, meaning they pay less in National Insurance contributions (NICs). They may also appreciate having greater flexibility in how they receive their earnings, which could contribute to higher levels of employee satisfaction.
As an employer, you could save on NICs and enjoy higher levels of employee engagement.
Improve your employees’ protection benefits
Having adequate protection in place could provide your employees with invaluable peace of mind and financial support when it’s needed most. Your business could also benefit from enhanced employee loyalty and retention.
There are many types of protection available, and your offer will likely depend on the needs of your employees and your budget. Two of the most common employee protection benefits are:
- Death in service benefit – here, an employee’s family receive a tax-free lump sum if the person dies while in your employment. The amount is usually a multiple of the employee’s annual salary – typically two to four times – and there is usually no ongoing cost to the employee.
- Income protection – this protects both employers and employees from the effects of long-term sickness absence. It can provide your employees with a regular income if they are unable to work and it could also provide rehabilitation and return-to-work support where needed.
Include private healthcare insurance in your employee benefits package
According to figures published by the British Medical Association in December 2023, NHS waiting times have increased to record highs. A median waiting time for treatment of 14.4 weeks was reported in November 2023, which is almost double the pre-Covid median wait time in November 2019.
And it’s not just waiting times on the rise – for example, NHS dental charges increased by 8.5% on 24 April 2023.
These changes in public healthcare may be driving higher demand for employee private medical insurance. Research reported by Employee Benefits revealed that this is the most in-demand work benefit, with 32% ranking it above other benefits.
So, providing private health insurance could give employees access to specialist care when they need it, enabling them to return to work sooner.
Also, adapting your benefits offer to help employees with their current challenges could establish you as an employer who cares about and listens to their people. This may boost talent acquisition and retention while enhancing employee financial wellbeing.
Offer attractive retail and leisure discounts
The higher cost of living is likely making it harder for some of your team to manage their everyday expenses and enjoy a fulfilling life.
An employee discount scheme might include benefits such as e-vouchers, online cashback, and discount codes for goods and services. These could be redeemable at a wide range of retailers, leisure centres, and attractions.
Offering such a scheme may not only reduce the financial stress of covering essential costs but also provide access to luxuries that your employees might not otherwise be able to afford, such as family days out.
This could help to improve your employees’ work-life balance, helping them to feel more productive and happier in their roles.
Provide access to financial planning support and education
Many people lack financial knowledge and don’t have access to professional education and support, which could contribute to feelings of stress.
In fact, an increasing number of employers are recognising that poor financial literacy is a key wellbeing risk. According to figures published by the Reward & Employee Benefits Association, 63% of employers recognised this challenge in 2023 compared to 58% in 2022.
As a result, the number of workplaces offering financial education and guidance is expected to almost double in the next two years.
For example, providing access to a financial planner could potentially reduce your employees’ financial anxiety and stress by increasing their knowledge of personal financial matters and improving their confidence in money management.
If you’d like to learn more about how to support your employees’ finances, we can help.
To find out more, please get in touch. Email email@example.com or call us on 01454 416653.
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.