This post is by our Launchpad intern Heng Chew, from the University of Sheffield.
In March 2022, the ONS announced that consumer price inflation has risen to its highest level in almost 30 years. With Brexit, Covid-19, Ukraine conflict, supply chain issues and other macroeconomic factors hitting the economy, the UK households are facing higher costs of living and subsequently more money worries. Poor financial wellbeing can have negative knock-on effects on lives, causing stress and sleep losses, leading to mental health and physical health issues, and ultimately deteriorating personal relationships and work productivity. Hence, financial wellbeing needs to be more than just a buzzword in workplaces and employers should take proactive steps within their financial budget to improve their financial wellbeing policies.
According to National Numeracy, over 90% of business leaders and MPs now agree there needs to be a renewed focus on adult numeracy by employers. The importance of financial wellbeing is clear as day, but devising and implementing solutions to overcome cultural and technical difficulties may be complicated. That is why, at Maji, we’re dedicated to empowering insight and action towards financial security for everyone, by designing a tech-driven financial wellbeing platform, simplifying financial complexities by cutting out the jargon, and building trust and long term relationships with our clients.
If you’re at the start of your journey towards building financial wellbeing for your employees, there are a few practical steps we recommend.
Practical steps for employers:
1. Financial health check
To solve a problem, the first step should be understanding the context, then identifying areas of improvement and avoiding potential complications. There is no ‘one size fits all’ financial wellbeing solution for every company, given the different demographics, unique needs, goals and barriers of employees. That is why, to reach maximum impact, employers should first run a financial wellbeing health check, draw insights from anonymized analytics, decide on specific investments and track their return on investments over time. At Maji, we diagnose employee financial fitness across 4 key areas: Financial Resilience, Money Management, Future Planning and Money Mindset. This gives employers a detailed understanding of the overall scores, categorical data, tailored recommendations and progress over time.
2. Accounts overview
According to Financial Capability’s survey, 39% of adults (20.3 million) in the UK don’t feel confident managing their money, and nearly nine million are in serious debt but only around a third receive help. To solve money worries, we must first understand how much money we actually have and where our money is. Hence, Maji provides each employee an accounts overview where they can connect all of their financial accounts (bank accounts, mortgages, loans, pensions, investments, etc). By being able to understand their finances and net wealth at a glance, employees will immediately feel less stressed about their money, having saved the trouble of checking multiple accounts and doing the sums. They can also now make more rational, well-informed financial decisions, or at least identify areas of improvement and seek relevant support.
3. Financial planning
57% of the working age adult population in England are estimated to have the numeracy level of children leaving primary school (Pro Bono Economics, 2021). It may be far-fetched for employers to educate all of their employees about compound interest concepts and lifetime financial calculations in a short amount of time. Thus, at Maji, we use tech to show employees their finances over time and help them model how small changes can make a difference to their future finances. Employees can also understand their cash flow better, build healthier financial habits with their future goals in mind, and track their progress over time, motivated by easy-to-see statistics. Employees will be more motivated at work too, confident that their labour will contribute to a promising future of financial security.
4. Financial coaching
Every single individual has different financial needs (e.g. debt management, pension schemes, insurance policies, long term goals such as buying houses/cars, etc). To maximise the benefits of employee financial wellbeing, firms should make every employee feel supported, especially during significant life events (e.g. maternity leavers/returners, bonus payouts, promotions, etc). Maji provides each employee a financial health score and generates a personalised action plan. We can also arrange 1:1 coaching from our team of supportive experts.
In the long run, by showing empathy and tailored support, employers can boost employee relationships, enhance loyalty, increase productivity, profitability and reduce costs (lower turnover, training and HR costs).
5. Financial education
Lastly, 48% of the UK’s adult population have worried about money once a week or more in the last month, and 52% find it hard to talk openly to someone about their financial situation (Money and Pensions Service, 2020). The best way to overcome financial difficulties in the long run is through education. Employers can run regular financial education days, create an online learning hub or invest in an external provider to deliver a holistic financial education programme for staff – just like Maji’s Academy. By creating a supportive learning environment, employers can create a supportive community where it is okay to talk about money, as everyone in the company (regardless of status, rank, etc) is working towards a common goal of achieving financial security and/or prosperity.
Feeling inspired and ready to take pragmatic steps leading your company towards better financial wellbeing? Maji can help! Our name stands for trust and respect. We provide data-driven tools, personalised support and educational content at unbeatable prices! Book a chat with us today and get a demo!