We all probably know this from experience, but research has shown that a salary increase is one of the key drivers for people changing jobs, with younger workers the most likely to move.
Whilst some turnover can be good for a business to inject fresh ideas, too much can be frustrating when you’re losing your best young talent, not to mention the direct and indirect costs of recruitment and training.
Simply increasing everyone’s salary to encourage them to stay isn’t perhaps realistic, or even the right reward strategy. So what else can you do?
If you improve the financial lives of your people, they’re less likely to have the need to move for a few more pounds in their pocket. They’ll value and appreciate the effort you’re making and are more likely to stay with you for the long-term. And the great news is, there’s plenty of things you can do that don’t have to cost you a penny!
HR teams often ask us, “Financial wellbeing sounds great, but where do I start?”.
The basics
Financial wellbeing isn’t something you can buy; it’s about behaviours and having the confidence to make good decisions about money. Educating your people around some of the basics is fundamental. Budgeting is a great place to start. Where does their money go every month? Are they still paying for things they no longer need? Could they shop around for better deals? All sounds pretty straightforward; but if nobody has shown you, why should you know how to do – or even that you should be doing – it? As a starting point, there are great resources on the MoneyHelper website, including a budget planner.
What your employees want
Consider the spending needs of your people. Engagement surveys can help you to understand the needs of your employees, but even without that, simple analytics and broad research like the FCA Financial Lives survey can help you understand what your employees are likely to want, so you can align education, engagement, and benefits accordingly.
For example, can you arrange corporate rates for things they’re already purchasing, and therefore save them money every month? Money that can be put to better use easing the cost of living, or potentially extra money to save for their future. Offers and discounts for everyday spending and big-ticket items, gym membership, and travel insurance are all benefits that are likely to appeal to younger workers and save them money on things they’re already buying.
More than just pension saving
Your workplace pension is likely to be your biggest reward spend after salary. And whilst pensions are a great, tax-efficient way to save for your retirement, is that the number one objective for your younger people? Unlikely. Managing debt and saving for a property are likely to rank higher. So, what can you do to help them?
Access to other workplace savings options, like ISAs, can help your people build up financial resilience and savings for short- to medium-term goals, rather than your financial benefits being solely focused on long-term retirement planning.
A key objective for younger employees will be buying their first home, so how can you help them with that? Does your workplace savings include a Lifetime ISA to help them save a deposit, with bonuses from the Government to aid reaching their target sooner?
In terms of education, do they understand the importance of a credit score and how to improve it? Do you offer access to a mortgage adviser who can help first time buyers? Bringing these benefits together is a great example of a start-to-finish strategy to achieve an objective, rather than simply listing a range of benefits without considering how they can interact and help.
Younger people in particular are unlikely to want to commit all their savings to retirement when they have other higher priorities for the more immediate years ahead. So, allowing them to re-direct some of their pension contributions to an ISA or Lifetime ISA helps them to focus on their own goals, whilst still benefiting from the contribution structure, rather than opting out entirely, and promotes a savings habit in the workplace from an early age that will then continue throughout their lifetime.
It’s not just your people who benefit
Helping to improve the financial lives of your people is a great thing to do, and there’s benefits for the company too. Improved financial wellbeing in the workplace will reduce the impact of absenteeism and presenteeism, whilst reducing the need for younger employees to leave, as you’re putting more money in their pocket by engaging them in your financial wellbeing strategy. And employees will thank you for it too.