For those involved in payroll activities the current strains presented to employees by the economy do not represent new challenges as for years the profession has been supporting colleagues with guidance to inform their financial decision making, delivering supportive financial initiatives, and where needed supporting colleagues in financial distress. What is different as we approach a turbulent period of financial instability is that this time the scene is set for pay and reward colleagues to be seen as a much bigger part of the solution and unlike the prior years when the profession has highlighted the role it can play in creating a positive culture around financial wellbeing and education, this time there really is a problem that needs to be contained and the services may be seen as a “must have” rather than a “nice to have.”
Part of being able to support colleagues with financial challenges will be the ability to connect with them through the availability of relevant technologies and this presents an opportunity for payroll and HRM systems to adapt to ensure that they are meeting the needs of colleagues.
It will be worth highlighting the rapid growth of colleagues needing to be supported with financial challenges and contextualising them against the role that the payroll profession may have to play in the solution.
The next wellbeing pillar – often in workplaces wellbeing challenges are only faced when they become a significant problem. We have seen this with addressing physical health, and then mental health and it seems like as we emerge from the impact of the pandemic and the current economic factors, we face financial wellbeing is the next wellbeing challenge that matters to employers as it starts to impact on absence and productivity.
Can’t be solved by the top table – the way that workplace culture was changed around mental health was through leadership, notably of the most senior leader often talking about their own challenges. The difference with financial wellbeing is that it is not always believable for senior leadership to talk in a way that is relatable to a lower paid workforce in a credible way.
The role of the employer – perhaps accelerated by the wider practice of hybrid working there has been a change in the nature of the role between employer and employee. We have become a lot more empathetic to not only ensuring that employees are happy in the workplace but also being part of the solution to wider personal matters. This means that the employer is often who employees are going to turn to first in times of need.
Breaking the last taboo – in many ways encouraging employees to be more open around financial challenges and feel they can talk in an open way has been a self-inflicted problem created over many years where colleagues were actively discouraged in regard to talking about pay or finances. This now needs unpicking to break the stigma and make talking openly around financial wellbeing an accepted norm so that solutions can be found.
Saving at source is key – as with most good practices in society the best results come when the activity is habitual. Creating good saving habits is no different and the option to save at source from payroll is the best way to ensure that the activity takes place where it is more mandated than voluntary. Being able to support employees with the facilitation to save into an appropriate saving vehicle is a function that is best delivered through payroll with appropriate technology.
Employer incentivisation – as with many habits’ encouragement or incentivisation can help reward the desired actions. Looking at how employers can incentivise not only pension saving habits but wider saving habits through employer contributions or recognition practices could be a crucial part of driving participation.
Pensions are part of the solution not the whole solution – saving needs have changed and on day one of employment contributing to a long-term saving plan of a pension is important but there are many more goals that require saving habits prior to then. Simply having a savings cushion to fall back on, mid term savings into an ISA such as a cash ISA or taking advantage of a Lifetime ISA all form part of a more resilient financial position for an employer and employee to progress together.
Education is key – what continues to be an underpinning factor is that financial education is key in supporting financial wellbeing. The impact on mental health increases where there is a sense of not only being unable to identify a solution but when the problem itself is not understood. Putting in place a robust financial education problem that helps employees understand the complexities of tax and statutory deductions, benefits that can help deliver day to day savings such as lifestyle benefit platforms and health benefits such as a cash plan along with the operation of savings vehicles such as a workplace ISA or pension is critical.
A differentiation factor in the future – for graduates entering workplaces looking at the employer stance and support around financial wellbeing will be as significant as looking at their support around mental health now. This is a generation that will enter workplaces with student debt, often without the parental financial security of prior generations and with immediate challenges presented by the cost of housing often restricting social mobility.
There really is a burning platform with workplace wellbeing with all signs pointing at the pay and reward professionals to deliver a solution to financial wellbeing. This is a great time for Pay and Reward professionals to be stepping up and using supportive technologies not only to educate but to support colleagues and employers in offering proactive solutions.