Written by Karen Parker
We know that money is a taboo subject, particularly here in the UK. In fact, there are statistics to show that 28% of us find it difficult to talk about our financial situation*.
This means it’s highly unlikely an employee is going to come to your door asking you to help them with their finances, but if there are concerns then they may be presenting other issues such as conflict with others or lack of motivation to mask the problem.
Burying our heads in the sand is a sure way to further problems, whether it’s mounting bills or not reviewing whether your pension will be enough for the retirement you want.
Despite our reluctance to talk, as an employer, you are actually well placed to understand when an employee might need access to knowledge and advice. You can make it simple and straightforward for the employee to access the advice they need before it becomes a problem.
There are some significant milestones throughout one’s career where access to financial information can have an impact on the direction of the rest of their lives. These are:
One: When a new employee joins the company.
A new employee may be earning more money, earning in a different way or at a different frequency than they have before. This means that information and guidance around how to manage their income effectively could be of benefit.
They may need to make decisions around their pension such as whether they want to contribute the minimum amount or more, find a level of risk they’re comfortable with or whether they’d like a salary sacrifice style arrangement.
Without any context for these decisions, people are likely to opt for the default, rather than what might be best for their individual circumstances. Some guidance from a qualified professional at this point can hugely alter the outcome.
They may also be entitled to other benefits such as life insurance or private medical cover which will require application forms completing. In an ideal world, they would have these benefits fully explained to them, including any limitations and how to access them should they need it.
This is also a great time to set off on the right foot as far as your new employee is concerned, shouting about the great benefits you provide and demonstrating that you care about them beyond their life at work.
The government encourages everyone to undertake a ‘mid-life MOT’ by reflecting on their health, wealth and career, which as an employer you are well placed to support.
“The mid-life MOT is free online support to encourage more active planning in the key areas of work, wellbeing and finances. It is aimed at both individuals and employers and can support you to make decisions that will ensure the future retirement you want.”
Learn more about the Mid-life MOT
As well as their financial future, this is a great opportunity to check in with employees to find out their aspirations in terms of their career – making sure that you are both on the same page about their potential for progression within the company.
While active retirement planning may not start until later life, saving for retirement, whether through a pension or not, starts much earlier. If your employee has had access to guidance about their pensions throughout their career, then hopefully they’ll be on track to achieve the kind of retirement they want.
Even with guidance, talking to an employer about your plans to retire can be daunting. What generally happens due to fear of repercussions on both sides, is that no one mentions retirement until the employee hands in their notice. This doesn’t particularly help you as the employer as it often leaves you little time to plan succession and handover.
A better way of doing things is to keep an open discussion going about retirement from an early stage, which by providing access to a financial planner you can do. While the work we do is confidential (unless the employee gives express their permission for us to share it) what we can do is encourage the employee to have those important conversations with you earlier rather than later. Plus, by educating people throughout their career with you, you can make a discussion around retirement seem much less daunting, leading to better outcomes for all.
While these are some areas to consider, remember your team aren’t likely to talk to you about their financial situation so there may be things going on which you are unaware of.
The best option is to make sure that your team can access the information that they need easily, without the need to ask you or explain their situation.
If you want to understand more about employee financial wellbeing, and how putting a strategy in place can help your business, contact us on 01642 525050.
*Salary Finance – Employers Guide to Financial Wellbeing 2019-20.Tags: employee benefits, employee financial wellbeing
Categorised in: Vintage News
This post was written by Karen Parker