For financial wellbeing to support the lives of individuals and transform the culture of organisations a clear strategy is required.
Unfortunately, it appears that many organisations lack a formal financial wellbeing strategy. We need to address this issue because without a clear strategy it’s much harder to bring in new kinds of financial support, provide effective communication about them or deliver long-term impact.
Research in 2018 found that just 10 percent of organisations said they had a financial wellbeing strategy,
In 2021, further research found this percentage had increased to 36 percent.
By 2023, Bippit’s Dynamics in Financial Wellbeing report found it had increased to 88 percent, but early this year another report said it was back down to 50%.
There’s a clear trend: financial wellbeing has risen up the corporate agenda. This is primarily because employers have started to realise that it’s the biggest cause of poor mental health at work and enhancing financial wellbeing can help employees make the most of their salary. It can also help employees understand and engage with other financial benefits, such as their pension. This is something to be celebrated as the conversation around money has been ignored for far too long with employees, and organisations as a result, suffering in silence.
But what about the fluctuations in the data? I think this represents different levels of understanding regarding how strategy works in the wellbeing space. My own experience is that while many more organisations have invested in financial wellbeing since the pandemic, very few have a clearly defined strategy.
This is important. As with all key investments into the people and culture of a business, long-term impact is achieved through a clear strategy aimed at improving a core metric. Without this, the return on investment from investing in financial wellbeing could suffer from a lack of support for initiative roll-out and engagement, be judged solely on surface metrics like uptake rather than impact, and see a lack of cross-company conviction to track the impact.
What does strategy look like in the financial wellbeing space?
Having a strategy means being intentional about a set of activities to achieve a meaningful result.
While some organisations will be following this with regard to financial wellbeing many do not. This could be because the business case is hard to track or murky, using terms like ‘improving performance’ or ‘improving financial wellbeing’.
It could be that a single activity or initiative comprises their entire financial wellbeing effort rather than a set of activities or that their financial wellbeing activity is not intentional or driven from multiple parts of the business, so progress is fragmented.
How to build a financial wellbeing strategy
First, choose a meaningful result. The best metrics are important to the organisation’s needs, relevant at board level and facilitate a clear measurement of impact.
Common metrics are reducing absenteeism due to sickness, reducing the number of mental health claims, increasing engagement with the pension scheme or improving retention of staff. Being able to reliably and consistently measure the metric is crucial.
It’s wise to plan multiple activities. You can’t bring in 10 different financial wellbeing initiatives at once or you’d never get anything done. But you also need to attack the issue from multiple angles over time.
Most organisations focus on one core ‘spine’ – often an inclusive, empowering tech-enabled solution – and then wrap additional support around this spine. This tends to be the best way to support a diverse workforce.
But you also need to consider whether you have cohorts which need additional support and how you’ll engage people across various life stages.
Part of a strategy is having a roadmap to get to an endpoint. All these moving parts need to mesh together well so that the support you provide is as impactful as possible.
Long-term funding is another key part of a financial wellbeing strategy. With any long-term strategic initiative ongoing funding is important as it takes time to bed solutions in and there will be new activities being introduced over time.
When financial wellbeing is not considered as a strategic initiative, HR teams tend to struggle to get additional funding for ongoing engagement and additional activities.
This makes it harder to achieve longer-term impact and, again, tends to orient the team towards uptake of a single initiative as the measure of success.
That’s why it’s important to tie financial wellbeing to meaningful results so there is longer-term buy-in from budget holders, especially as you bring in new forms of support over time to really turn the dial.
Ultimately, the financial wellbeing of individuals in our organisations changes and shifts over time. This means it needs to be a long-term strategic initiative underpinned by a belief that if you invest in making people feel more satisfied, they’ll be better able to perform in the workplace and more likely to stay.
