Strategies to support employee financial wellness

In an environment marked by increased cost pressures, talent market challenges, emerging technologies, and sustainability goals, employers continue to face complex challenges in meeting the diverse needs of their employees.

Against this backdrop, levels of employer responsibility for employee financial wellness is growing. Fidelity research shows that nearly three quarters of employers we asked now feel highly responsible for the financial wellness of their employees, indicating that this has become a vital component of a benefits strategy, and a necessary step to remain competitive with peers.

Financial wellness programs are more than ordinary perks. Today, leaders think of them as tools that may help to enhance employee satisfaction, impact turnover, and contribute to a more engaged workforce. The same research shows that employers who feel very/extremely responsible for the financial wellness of their employees report much higher levels of employee satisfaction (84%) compared to those who don’t (59%).

Fidelity’s approach to financial wellness

Financial wellness is more than just compensation, and at Fidelity we take a holistic view. Objectively, it is an individual’s total financial situation and subjectively, it is how the person feels about their financial situation, including their confidence.

We’ve identified four common areas of financial wellness: budgeting, debt management, savings, and being financially prepared for the unexpected (in other words, protection).

Fidelity’s global sentiment survey research examines the attitudes and actions of workers around the world in these four areas, our data on workers in the UK shows:

• Budgeting - only around half (52%) feel confident in their ability to manage their money day-to-day and just over a third (38%) are confident in maintaining their current lifestyle.
• Debt - only one in six (16%) reported borrowing more, but nearly two thirds (69%) say paying of debt is a long-term financial goal.
• Saving - while saving is the most pressing need for over a third (38%) of workers, many are experiencing stress in meeting their savings targets and even more (77%) feel some level of stress when it comes to saving for retirement.
• Protection - nearly all workers (95%) say being financially prepared for an emergency is a long-term financial goal but less than half (42%) are confident in achieving that goal. 

Confidence and knowledge are key drivers of financial wellness and our research shows that organisational leaders who address five or more financial wellness topics report lower turnover rates compared to those who cover just one or two.

Strengthening financial wellness

We’ve identified four targeted strategies for employers to consider when reviewing their financial wellness programmes:

1. Assess workforce needs
   
   Assess whether parts of your workforce are falling short in key areas of financial wellness to provide targeted help, Fidelity’s financial wellness tools may be a starting point to identify specific concerns for your workforce.
2. Build financial confidence
   
   Building financial confidence across the groups you’ve identified, with small steps, small wins, and encouragement may boost confidence. Engagement programs like Fidelity’s Workplace Workout provide guidance and small steps for your employees on budgeting, retirement planning, and investment strategies.
3. Enhance benefits offerings
   
   Expanding workplace benefits to include savings and emergency fund support may help to improve financial security for your employees. Programs like Fidelity’s Invest@Work provide structured solutions to make investing easier.
4. Foster social support
   
   Supporting employee resource groups and providing financial literacy workshops can build a culture of financial empowerment where your employees feel they’re in control of their finances. Fidelity’s webinars offer valuable insights to support the financial confidence and wellbeing of your workforce.