Importance of Flexible Working Culture and Support of Staff Financial Health
If there is one small positive we can take from this devastating pandemic, it is the way employers are now embracing a more flexible working culture. Before the world changed, the notion of telling your boss that you need to take some time out to homeschool the kids or walk the dog during the ‘nine to five’ seemed incomprehensible. Now, not only is this behaviour normal, but many businesses are recognising flexible working patterns are now completely essential to protect staff wellbeing and avoid workforce burnout.
In fact, new research [source] is suggesting Covid-19 has broken down the overall stigma around flexible working in the UK. Those employers embracing changes to the working day, are benefitting from better levels of productivity, concentration, and motivation [source] amongst their staff. As a result, many companies are now starting to take elements of their HR policies more seriously. Offering better flexibility and benefits is becoming even more important to not only retain current staff, but also attract new talent.
While these changes in outlook are a positive step forward for overall wellbeing, it has to be argued that employers, now more than ever, need to be doing more to support their staff’s financial health. The pandemic has had a seismic impact on the liquidity of many workers. Our recent research revealed nearly half (41%) of UK workers are now relying on at least one new loan, credit card or overdraft, and two-thirds (66%) are regularly suffering from personal finance-related stress. Even when the economy was functioning normally before Covid-19, 82% of workers were still relying on high cost credit to get them through the period between paydays.
While this problem isn’t new, the pandemic has now brutally exposed the flaws of a financial support system that is leaving many workers with no option but to resort to high cost credit to make ends meet. Data shows financial stress can have a detrimental effect on a worker’s performance and wellbeing.
So this begs the question…if employers are now reaping the rewards of better flexible working patterns, isn’t it time the same mindset is now applied to supporting staff financial health too?
Just like they’ve embraced change to the rigid ‘nine to five’ working day, employers now have the opportunity to provide better flexibility when it comes to supporting worker liquidity, and there is smart technology sitting within the UK fintech scene that can help with this. Whether it’s changing the way employees access their pay, or providing better access to financial education and management tools, companies can equip their staff with the options they need to better take charge of their finances.
In fact, demand for better financial flexibility and support from employees themselves is growing. Over half (59%) of workers think having greater flexibility with how they access their monthly salary (either earlier or in more regular installments), would decrease their reliance on high cost credit during the pandemic. To help support their workforce more effectively, one way employers can start to embrace more flexibility is by offering an ‘earnings on demand’ (EoD) payment model.
Not only does this give employees the chance to access a portion of their monthly pay in real time, it also provides them with greater flexibility and liquidity to navigate financially challenging times of the year. Earnings on Demand solutions are ethical alternatives to high-cost credit options such as payday loans, credit cards and overdrafts. This increased liquidity can help avoid the use of these other options and means they can more flexibly access their own money on demand without accruing debt.
However, organisations need to be careful – not all EoD solutions are equal and the devil is in the detail. We would encourage employers to check the small print and invest in a model where workers are only ever able to receive a portion of their earned pay, meaning they won’t accrue debt. Not all providers operate this system, but if an employer can find the right technology partner, this service can have a huge impact on the morale and productivity of their workforce and won’t affect any part of their existing pay cycle. There is also the option to place a cap on the amount that employees are able to access in any one go.
In addition to Earnings on Demand, employers can also help nurture the overall financial health of their employees by providing them with better financial management tools, such as savings, rewards and budgeting tools. This can help workers better understand their finances and empower them to make decisions that ultimately make their money go further. In fact, data suggests that employees are 74% more likely to stay with a company that offers flexible pay options and similar benefits. Yet, this is just the tip of the iceberg: the potential benefits of prioritising employee financial health are endless.
So as companies continue to make people-conscious decisions that benefit their workforce in 2021, now is the time to put staff financial health at the top of the priority list. Just like we have embraced changes to flexible working, now more than ever, it’s time to tackle the issues of worker liquidity and find better 21st century solutions to support them.
By-lined to James Herbert, founder & CEO, Hastee