CIPD podcast: How to support employees’ financial wellbeing – the dos and don’ts 

Jennifer Jackson

Hi, everyone, welcome to a People Management Insight podcast in association with Zellis, the award-winning payroll and HR solutions provider, where we are discussing how to support your employees financial wellbeing. I’m Jennifer Jackson, Contributing Editor at People Management Insight. And I’ve got two expert speakers alongside me today to discuss the unprecedented challenges facing HR leaders right now, as we put plans in place to help our people steer the choppy waters of a cost-of-living crisis. We’re going to discuss how you can identify those employees who might be struggling financially, and how Employee Assistance Programmes can help. Who are here to offer their guidance on these issues is Serco’s group head of health and wellbeing, Jamie Broadley, and Gethin the dean, Chief Innovation Officer at Zelis. Thank you very much both for joining us today. Firstly, Gethin how can businesses help ease employee stress during the cost-of-living crisis?

Gethin Nadin

Hello, thank you. the first thing to understand and appreciate is that this crisis is affecting every single employee. The data shows us that whilst lower income households are obviously making some pretty difficult financial decisions every day, even those employees who are kind of on middle-to-higher incomes are facing a squeeze on their income, and subsequently their living standards. And so price rises of this magnitude have a pretty material impact on employee wellbeing, not just finances. So it’s important we understand that we’re going to witness an impact on overall wellbeing because of this crisis. Stress will increase, pressure is going to cause employees to lose sleep. And obviously, that kind of stuff negatively impacts mental health. I also think compounding this situation will be the fact that many employees won’t be able to do the things they usually do to destress and decompress from work. And in many ways, it’s going to feel like another lockdown, where people work hard all week, they finish a really productive week, they might be a bit stressed from work, and they can’t go out to have the meals out and the holidays or trips because they’re having to make some pretty strict financial decisions. So at a very basic level, we have to ensure we have the support in place for those people that are really stressed and overwhelmed by their finances. Every employer should be thinking, you know, do we have that kind of debt support in place? Can I speak to somebody when I’m feeling overwhelmed by the situation? And so that’s something I’d like to see every employer focus on is, if I’m stressed, and I’m in that point of crisis, how are we actually helping the individual employee?

Jennifer

Great, thank you, Gethin. Jamie, again, thank you for joining us as well. Is there anything you can add there on how organisations can help support employees during these really tough times? Yeah,

Jamie Broadley

Thank you for having me, great to be involved in this and completely agree with what Gethin started with. So I think that this shines a light on not just financial wellbeing but wellbeing across the whole spectrum. And we know that one of the biggest drivers of a number of wellbeing challenges is finances. And it’s one of the things that isn’t spoken about. So making sure we are encouraging conversations, we’re raising awareness and using this as an opportunity to get into some of those places where we perhaps haven’t been before, is a really good starting point. And the other area here is that this goes back to some really basic kind of good work principles and making sure that people have got the resources that they need, both at work and outside of work. So starting from it, whilst it might be tempting to go to some of the kind of shinier reward and benefit type of solutions, back to the fundamentals of kind of hourly wages, and the employment contractor thing is going to be a really important first step of seeing what is the art of the possible in that space, and where employers can step up, even if only during the short term to support during the challenges that we’re facing the minute.

Jennifer

Great, thank you, Jamie. So we know Employee Assistance Programmes are designed to help employees with personal or workplace issues that might be impacting their performance, wellbeing, mental or even physical health. But how do they actually work in practice? And can they really improve retention and new recruitment and actually prevent absence from work? What do you think, Jamie?

Jamie

Yeah, so with EAPs they are like many of the other services that we might talk about in the wellbeing space; they’re a tool. So they can be used really effectively, or they can sit on the shelf and get very low utilisation. Typically, we don’t see high utilisation, with EAPs across the industry. And that’s largely because people don’t necessarily know that they’re there or, if they are aware of their presence, they don’t know what they can use them for. So the typical EAP will offer kind of talking therapies, approaches access to counselling to support with mental health conditions, but then also financial, legal and people manager adviceline elements as well. So, actually, again, kind of the opportunity that’s come about because of the situation that we’re in at the minute is that it’s a great opportunity to raise awareness of some of those other aspects of that service, and to really signpost people proactively towards it, make sure that’s part of all of the regular manager conversations, making sure we’re promoting it in team meetings, all those other usual channels, and getting people using it and talking about the potential benefits that they they’re experiencing.

Jennifer

Okay, thank you, Jamie. Gethin, what do you think there? How do EAPs work in practice from your perspective and experience?

Gethin

So it’s probably been 25 years since I implemented my first EAP scheme in a in a UK employer, and I’ve done many since but it’s gone through a very big evolution. You know, there was a point at which there was just this race to the bottom for EAPs, which was, we’ve got to offer it, it’s a ticking the box for my duty of care as an employer. And so that rhetoric kind of drove this idea that the cheapest EAP I could find, I would just implement for that reason. It’s a ticking the box and it’s sorted. I’ve done some kind of due diligence, some kind of kind of duty of care. And I think we’ve evolved that pretty significantly. If we look at the data that’s changed hugely since the pandemic took place. But before I kind of answer that question, Jamie raised a really interesting point about utilisation, because we tend to look at any kind of tool or benefit we put in front of people and look at the take up and engagement of that thing as a measure of how successful that thing is. And that’s become a bit of a misnomer, because if you look at EAPs, low take up can indicate there are issues among a workforce, but also high take up can as well. So if lots of people using it that can tell you there might be lots of problems. But if lots of people are using, if less people are using it, that could also indicate that there’s issues among the workforce. But those issues might mean, am I willing to speak about this stuff at work? Do I know this tool even exists? So when we look at engagement with things like EAP, is it’s not the same as looking at benefit take up and things like that. But EAPs have grown in their uptake over the last few years because of the pandemic. And for many, they don’t seem to really realise that these services can support those in financial stress, too. For many employees, this crisis won’t just end and generous pay rises can still leave employees behind where they expected to be this year. So having a way for your people to be able to have a confidential conversation with an expert is very valuable.

64% of employees in one recent study said that EAP service prevented them from being absent from work. And that same study found an ROI of between three-to-one to five-to-one on investment in EAP. But if you look at the data a couple of years later, in the midst of the pandemic, how EAP support staff was really, really interesting. So that ROI now rocketed to a return of about 7.27 for every one pound invested. So you’re looking at investment of over seven pounds return for every one pound invested. And that data is from the biggest ever analysis globally of VoIP services. So pretty, pretty, pretty strong data to be looking at. But what we tend to see quite often with EAPs in the workplace is low communication and promotion of those services tends to sit behind the low usage of them. And so when communicated frequently and properly, EAPS’s should be seen as part of the modern organisation and part of employees lives, not just there for when extreme stress or worry kicks in. So I would love to see more employees picking up the phone to a counsellor when they’re just feeling a bit down about life. So they start to get used to talking to somebody about their worries, as those worries start to materialise, rather than wait until the right point of crisis, to speak to somebody. And the more we can take that proactive view and use EAPs for that the better. And everything we’re going to talk about today should be about preventative measures and long-term view, not just reacting to current circumstances. I mean, if we look at the data, people have been stressed and worried about their finances on a very large scale since 2019. So the pandemic made that worse, this crisis has made that worse. But actually, what we’re dealing with generally here is how are we supporting people with the stuff that’s stressing them? And EAP is a really good way of doing that, regardless of what the stressor is.

Jennifer

Great. So it sounds like a bit of a cultural change in terms of attitudes towards it and just that awareness of EAPs

Gethin Nadin 09:38

Absolutely. And what tends to happen is employers will put posters up and we’ll send emails out and you know, a big problem we have with mental health generally in the workplace is people don’t associate what they’re going through with poor mental health. So people fail to act and ask for support because people just think, oh, you know, I’m just going through it. It’s not as bad for some people. It’s not depression. It’s not anxiety. I don’t need to speak to to a doctor. But actually, that poor relation, of mental health is where most people sit, which is, I just don’t feel very great at the moment. And actually, if we don’t get people to make themselves feel better when that kicks in, that’s what the data tells us starts to lead to more complex issues. And the pandemic was a really good example of that, because most people are like, Okay, well, I’ve still got a job, and I still get to see my friends, and my parents are still alive and haven’t caught the virus. So what have I got to worry about? You know, comparatively, people are struggling with lots of things. And that attitude is preventing people from asking for help.

Jennifer

Interesting, well, talking about illness; according to a recent poll covered on People Management, 46% of employees have forced themselves to go into work, when they should actually have taken time off Ill because they just felt they couldn’t afford to miss out on those earnings. So do you think the cost-of-living has inadvertently created a situation where more and more employees are actually feeling forced to go into work, when they may not actually be well enough to do so? What do you think Gethin?

Gethin

Yeah, 100%. I mean, if you look at sick pay, and sick policies in the UK at the moment, grossly behind where they should be, and the pandemic really highlighted that, that. People were making some pretty difficult decisions, there were friends that I know who through the pandemic, knew that they wouldn’t get a decent level of sick pay, if they didn’t go to work. And contractors, and people are in this position, as well. And some of those kinds of workers who kind of delivery drivers and things like that, and zero hour contracts, etc. So, they were making some pretty difficult decisions around well, if I go out shopping, and I go to a supermarket, I’m putting myself at risk of catching the virus, if I catch the virus, and I have to self isolate, I’m not getting enough money to be able to do that. So I had friends who were literally not going out, because they were so afraid of catching the virus. And they couldn’t afford to do that. So we’ve got this long history of people who are kind of, I’m too ill to work, but I’m too poor to not work and having to make some pretty difficult decisions. So that’s absolutely a big hidden dimension of this whole situation. And, you know, over the last couple of weeks here, we’ve seen people being interviewed on the news who are kind of saying, you know, I’ve got, I’ve got to go to work. And if I can’t get to work because of a rail strike, or I can’t go to work because I’m ill, I don’t get money. And that’s a big impact. So, you know, inevitably people are going to go to work whilst ill, and throughout pandemic, that became a huge public health concern in the UK and the US.

Jennifer

Yeah, very important issue. What do you think, Jamie?

Jamie

Yeah, certainly similar to Gethin’s point earlier that this is something which was there pre-pandemic as well. So we knew the stats around presenteeism were was already a challenge for us. So this is definitely something that has worsened but isn’t a new phenomenon as such. And we’ve certainly seen plenty of examples reported, where people are now taking on additional jobs and maybe picking up evening and weekend work to try and supplement their main income, and the impact of that are obviously a myriad. So we’ve got the obvious individual impacts of the stress and the fatigue that will come with that. The knock-on impacts around relationships and family. And thinking about it from a kind of a HR and workplace point of view. The safety incidents that could happen from people who are fatigued who have been working kind of 50 plus hours in a week, the instances some of the HR challenges that might come up as a result, I imagine we will start to see the knock-on impact of some of those behaviours in multiple different ways. And there’s not a simple answer for it really.

Jennifer

Yeah, sure. Now, I mean, money is always a sensitive and personal issue, and people rarely open up when they might actually be in trouble. So, from an employer’s perspective, how do people teams identify an employee who’s struggling financially? And how can putting a financial health policy in place help perhaps? What do you think, Jamie?

Jamie

Yeah, so I got a stat from a recent conference, which I do need to test out, but it is one of my favourite new stats to wheel out. So, one of the financial wellbeing organisations were reporting that people were six times more comfortable discussing their, their sexual history with colleagues at work than their finances, which is a really helpful one. How accurate it is, we’ll see. But just to show the divide in the comfort levels around talking about personal finances, that’s where we can then start ending up feeling isolated around it and not connecting with support services such as getting as described earlier on around the EAP. So, there’s a few different ways in which in which we can do this. Examples of things that used in the past and organisations can have campaigns like ‘I wish my manager knew’ something that seemed to be really effective. Were just creating the permission to have conversations about things which might be beyond the kind of typical workplace conversation and doing some container building around what conversations are okay to have in one-to-ones or team meetings, simple little checking exercises at the staff team meetings are a really good way of getting into how people are doing below that surface level. And that might be where then there’s a degree of comfort to start connecting with financial wellbeing is an issue for me at the minute or that might be driving some other some other wellbeing challenge. And it’s only from that point of awareness that then can a meaningful connection to some of those support services or some of those routes be made. It’s one thing to signpost, but if we’re not signposting and creating permission at the same time, or we’re normalising, or we’re kind of seeing people where they are and meeting them where they’re at, then it’s very unlikely that they’ll take that step to go on and access those services and potentially get some of those benefits. So that groundwork is hugely important.

Jennifer

Great, yeah. So, some good ideas there. Thanks, Jamie. Gethin what do you think?

Gethin

What we’re trying to do really is think about, it doesn’t really necessarily matter what the stressor is, because if we look at the data, our emotional connection with money means that somebody could get really concerned over carrying a kind of £500 credit card balance, in the same way that another employee might not get stressed about having £3000 into their overdraft. The way we worry about stuff is very personal to us. And so actually, if somebody’s struggling with money, or they’re struggling because of a relationship breakdown or divorce, it almost doesn’t matter what that stressor is, what we’re trying to do is help people with the things that are affecting their wellbeing, that are affecting their mental health. But I completely agree with Jamie that what we’re trying to do is remove the stigma of talking about money at work in the same way that we’ve been trying to remove that stigma of talking of mental health at work. And so have we created the environment where an employee feels safe and comfortable to go to their manager and say, I’m worried about money. There’s this very hidden dimension to financial wellbeing in the workplace. If we don’t build that trust and a safe space to have these conversations, we are going to miss those people who are struggling the most. And so I don’t think there’s necessarily a need for financial health policy in itself. There is a very cyclical relationship between almost all areas of wellbeing. As Jamie mentioned at the start, you know, our physical wellbeing is harmed by losing sleep and worrying about money, our emotional wellbeing is harmed by the stress and relationship breakdowns that are caused by money. And there’s this very interdependent relationship between money and the rest of our wellbeing. And so financial wellbeing just needs to form part of an overall inclusive wellbeing strategy.

Jennifer

Interesting. Thank you Gethin. Now, Charles Cotton, who’s the Senior performance and reward advisor at the CIPD, was quoted recently as saying HR teams can help by signposting sources of financial information and guidance, and ensuring that eligible low paid workers are accessing both the company and state benefits to which they’re eligible. So, what are some of the key benefits that can help people who are struggling to make ends meet right now? Jamie, do you have any examples that you can share with us?

Jamie

So the starting points – and we mentioned earlier on is that it can be tempting to go to some of the shiny things in this space first – whereas actually going into some of those kind of real good work principles and seeing what we can do to address challenges in those areas first, is definitely the initial step I would recommend. But then there are obviously some benefits which can help given the current circumstances. So often, most organisations, certainly larger ones will have a rewards or benefits platform with a range of different discounts and things like that, within they can often be a little bit challenging to navigate, certainly for frontline workers who maybe have less access to devices and to the internet for being able to search through these things, , pulling out the key ones, which will speak to some of the challenges we’re facing at the minute. So, thinking about, well, what are those daily weekly expenditures, whether that be fuel, whether that be food, whether that be bills? How can we make sure that whatever discounts we do have in that space, we’re really taking those to the people that will benefit most from them? So that’s a really good starting point. And then also recognising where we’re not the experts in some of these areas and connecting colleagues with those organisations with those charities, with those departments that are so things like Citizens Advice, and the Money and Pensions Service are two great examples of where we can get tailored advice for someone’s situation and working through that in a minute. visual way, seen some great benefits that that can come from that? So those are those are kind of two potential starting points for this.

Jennifer

Great, thank you, Jamie. Gethin, do you have any other advice or any key benefits you wanted to highlight that can help people who are struggling to make ends meet?

Gethin

Yeah. So first of all, if you pardon the pun, Charles Cotton’s right on the money, creating a place for people to go is a really, really important part of a financial wellbeing. So you know, only a third of managers say that they are sufficiently confident to be able to direct employees to the appropriate support within their organisation. And less than 20% of employees say they’re actually aware of where to go to access wellbeing initiatives. So a lot of this is hidden, making access to some of those things is really, really important. Giving people a place to go when they’re stressed, and they’re worried about money, and they can get the answers or support they need. But also, when people just want to be proactive, and they want to take a long term view and make some decisions now and be a bit more proactive about the things they might do to improve their finances is really, really important. And the primary recommendation of 2019 report by the Federal Reserve in the US, and a 2017 report by the HMRC. And the FCA in the UK, was to give staff a kind of user-friendly, web-based portal so that employees can access information education and signposting that’s going to help with their financial wellbeing specifically. So that’s really, really important to be able to do. And I also think we should be focusing, just like Jamie said, on making net pay go further. So we’re in a situation at the moment where the government and the Bank of England and the UK are asking employers not to give pay raises, because that will protract the situation for longer. But obviously, that kind of advice isn’t helping the person on the ground who’s struggling to put food on the table and pay their energy bills. And so how can we help people to reduce their outgoings? So we’ve been working with customers within the status group to look at benefits like electric car salary sacrifice schemes that can reduce the cost of running a vehicle by as much as 50%. So moving people away from those fuel increases by actually moving into electric vehicles. As Jamie mentioned, offering employee discount schemes, we’ve worked out that the average employee can save about £1,000 a year on the shopping they spend every day, can we put tools like mortgage switching in front of employees to help them free up money? I did that myself recently and save £300 a year. So you know, we’ve have all these different pulleys that, you know, the aggregation of marginal gains means these things add up to a pretty big saving over a part of travelling period. And I also think financial education has been shown to play a really significant role during times of recession or economic uncertainty. So employers need to make sure they have some form of financial education in the workplace as employees don’t tend to get this help anywhere else. And so without the kind of right knowledge and skills, employees are at risk of making some decisions, while under the stress of the crisis, that might harm them in the long run. So you know, financial education helps people to make more informed decisions now, avoid some rash decision making. And we saw this during the pandemic right around the world where people were reducing things like pension contributions to free up money whilst they’re in the crisis, whereas actually, that might be setting back their retirement plans five to 10 years by by doing that, so if people have to make those decisions, fine, but we want them to be as well informed as possible. And lastly, with that kind of ridiculous rate of interest we’re seeing at the moment, we should be looking at how can we get employees access to affordable credit. So for those employees with existing debt, or those who have no option but to take out a loan or line of credit? Are we making sure they’re doing that in the best way possible? And so there are some organisations out there that are looking at things like payroll lending, as a way of getting people access, access to cheaper money, and in a more structured repayment way than other forms of consumer lending. And also, if I could briefly touch upon, you know, of all the research, and really I’ve been doing in financial wellbeing for the last decade, employers should be looking at the way they support their people through a kind of core set of five employee behaviours that we’re trying to improve. And so that is:

• Financial security. So how are we helping employees to manage debt effectively with a minimal impact on their overall wellbeing?
• Financial control, so making sure employees have full awareness of spending and saving and setting goals and pursuing long term goals.
• Financial confidence, employees have improved knowledge of money matters, and we’re helping the increase that
• Financial literacy
• and financial resilience. So how are we helping employees to be able to meet everyday expenses, but also be able to take a knock as they kind of build future protection.

And so, within all that, we’re starting to think about not just support for those people in debt and access to affordable credit, but as many opportunities to save as possible, reducing financial stress, increasing people’s awareness of their spending, getting better, better understanding of financial products, and also holding some of those insurances against key risks. So actually, you know, their situation doesn’t get worse because they’ve gone through a life event like long-term ill health or death of a spouse, losing their job, they’ve got some of those insurances in place that mean, they’re going to kick in if people start to come into more financial stress.

Jennifer

Great, thank you. Cotton also said that organisations need to ensure their wage rates are actually fair and liveable, and that there are opportunities for in work progression. So what do you both think about that can targeted learning and development programmes, better flexible working arrangements, for example, and just paying the living wage? Can these things help employees who are living in poverty? Really? What do you think Catherine?

Gethin

Generally, when we look at financial wellbeing, we’re thinking of two words. And that’s confidence in control. So how do we give people more confidence in their financial situation, and their ability to survive this crisis, and more control over some of the things especially when so much is out of employee’s control at the moment? But when you look at all the data on what harms employee financial wellbeing at work, it’s all pretty clear. You have to pay the national living wage, you’re in a much better position with your employees. If you do that, zero-hour contracts and uncertain shift patterns drive poor financial wellbeing so avoiding those where we can. Benefits can offer a great deal of support to those that are struggling and protect them against financial future distress, as I mentioned. But I also think the other ways that employers may cause stress without knowing it, things like not paying expenses quickly. So, expecting employees to outlay for work, travel in advance and claim that back, if that only consolidates on a monthly basis, you might be adding to employees’ financial distress. Also, if you’re encouraging or supporting working from home or remote working, or you help them to finance the cost of doing so. So that’s contributing towards increased electricity bills, or paying for home office equipment, or even one-off payments that could go a long way towards helping people at the moment. So, if you’re not given pay rises, and you believe what the government and the Bank of England say about not doing that. We’ve seen loads of examples of employers saying, You know what, I’m going to give everyone 2000 bonus, just to take the ease off those costs of live increases increases this year. And also with flexible remote working for many, it’s reduced their outgoings. So when we think about forcing employees back to the office, we need to think about that for the lens of financial wellbeing, you know, are those people experiencing financial stress, they might be adding to unnecessary expenses. So actually, if we are inviting people back to the office, can we kind of remove some of those financial barriers to doing that. And if you look broadly at what most people are going to be able to afford this year, most employees are given between a three and 4% pay rise, that is only really covering the basics of most of the rising costs this year. So, it’s about how do we add to that? So, can all these pulleys and levers that we talked about today, get that three to 4% pay rise that many might be getting, and make that feel more like a 10% pay rise? So, people are actually at the level where they would have expected to be should this crisis not taking place?

Jennifer Jackson

Yeah, thank you, Gethin. Jamie, what do you think?

Jamie Broadley 27:57

Yeah, I completely agree. that’s a really helpful summary of all of the different options that workplaces potentially have. So we’ve done some some analysis looking at how these kind of public health factors play in you can see there’s a really clear correlation between absence and deprivation scores of the constituencies in which in which people are living. So all of that messy, complicated public health stuff does play into the workplace in a really meaningful way. And Gethin has done a great job of summarising some of the levers that we’re able to pull from an organisational point of view to help support some of that. The reality will be that there’s there’s no one lever, which is going to be the answer. It’s going to be a combination of multiple. For the first part of your question around that kind of in work progression and those targeted L&D programmes. Yes, those are, those are all great, but they’re probably a medium-term solution. When, within this conversation, a lot of people are operating from a very threat brain point of view at the minute. So, we’re very much in survival mode. So, we’re not necessarily in a place to start thinking about kind of growth and development in the way that we would be in more normal operating circumstances. So it may be that when things hopefully settled down, that there’s an opportunity for those conversations around Okay, well, what have we learned? What are reflections? Is this, is this something that you, you want to start pursuing a new role? A pivot? progression? Those conversations may work in some cases now. But generally speaking, most people would just be focused on how do we go day to day, week to week, so managers shouldn’t be surprised if they don’t get the reaction that they were perhaps thinking they would when talking about some of those potential development opportunities.

Jennifer

Okay. Interesting. Interesting perspectives there. Thank you Gethin and Jamie. So it’s been a really, really interesting discussion. We talked about how we need to change perceptions to Employee Assistance Programmes, how financial education and financial wellbeing is just as important as mental wellbeing. We need to direct people to the support they need in user-friendly ways, whether it be highlighting things like electric cars, salary sacrifices, key shopping discounts, mortgage switching and really we talked about the financial education in the workplace and how people might not actually be getting that financial education anywhere else. So, it’s up to people teams to look at that. And guess then you talked about the five key behaviours of financial security, financial control, confidence, and resilience. And Jamie, you kind of finished up by sort of talking about progression might be on the backburner for many people now as we’re focused more on the day to day.

Well, I hope you’ve all enjoyed listening to what our speakers have had to say, and picked up some useful tips to take back to your teams. Thank you again to my guests today, Jamie and Gethin, for sharing your insights and experiences and expertise of these most trying of times. I’m Jennifer Jackson, thanks for listening, and have a very good day.