The 2023 Financial Wellbeing Research, by the Reward & Employee Benefits Association and WEALTH at work, outlines key developments in workplace support aimed at bolstering employees’ financial stability.
- Key risks to employee financial wellbeing include rising childcare, rental, inflation, and energy costs, with employers increasingly aware of poor financial literacy as a significant concern.
- Only a minority of employers plan salary increases aligned with inflation; most are opting to boost investment in financial wellbeing programs for employees.
- Plans to expand financial education, guidance, and advice are on the rise, with independent providers seeing a notable projected increase in employer support.
- The popularity of savings products, like payroll savings schemes and employee share plans, is growing as a method to enhance long-term financial security.
The 2023 Financial Wellbeing Research, conducted by the Reward & Employee Benefits Association in collaboration with WEALTH at work, presents a comprehensive view on developing financial strategies in the workplace to support employee financial stability. Employers recognize major financial risks for employees, such as rising childcare costs (64%), rental expenses (66%), consumer inflation (75%), and energy prices (77%). Nearly two-thirds (63%) of employers now view poor financial literacy as a critical area of concern, climbing from 58% in the previous year.
Faced with these challenges, few employers are opting to adjust salaries in line with inflation over the next two years. Instead, 53% are prioritizing investment in financial wellbeing resources. This shift indicates a growing reliance on providing employees with essential financial knowledge and management tools, rather than mere salary adjustments.Organizations are increasingly offering or planning to offer independent financial education, guidance, and advice. Currently, such provisions include independent financial education (62%), general financial advice (56%), and retirement-specific guidance (60%).
The trend towards financial coaching is set for a substantial increase. Currently offered by a mere 12% of employers, plans are in place for 41% to adopt this in upcoming years—a steep rise of 241%. Additionally, the development of workplace savings products is gaining traction. Within the next two years, planned offerings include pay-as-you-earn savings schemes (34%), employee share plans (42%), ISAs (45%), and long-term incentive plans (54%).
The survey underscores the detrimental impact of monetary worries on employees’ personal and professional lives. Employers are advised to ensure employees are well-informed about available financial benefits and encouraged to engage with them proactively. Financial education and guidance are pivotal in enhancing employees’ understanding and fostering behavioral changes that lead to financial resilience.
In sum, expanding financial education and savings plans in the workplace is crucial for fostering a financially resilient workforce amid economic pressures.
