Is Money Really Everything

For the first time in a long time candidates are driving the recruitment market. Organisations that have a better understanding of their (current and future) employees' needs, values and pressures will see a clear advantage in the fight for talent.

Employers can often get caught up in the hype and the race to attract new talent by increasing total remuneration packages, but where does it end? Is it sustainable? The short answer is, no.

In our latest Workforce Trends Report: Workplace Wellbeing Index, we have determined that, although a competitive salary is vital to attracting talent, it is not enough to keep it. Less tangible factors like purpose, feeling safe at work and career progression are just as important to retain employees.

How important is salary?

With economic pressures, inflation, rising interest rates and increased cost of living, financial concerns are top of mind for both employers and employees. When times are tough, most reflect on where we need to place our focus. Our research places personal finances as the second most important factor impacting our lives, with only 50% of respondents being satisfied with their base salary1. What this means is that employees will likely ask to be paid more if you aren't meeting market standards.

Only 50% of respondents being satisfied with their base salary1

Organisations keen to stay on top have been tackling this issue head on and are looking beyond remuneration and short term incentives, using this environment to question how they are addressing their employees' 'needs'. Employers that are getting this right are reviewing how they can amend their 'employee benefits package' to ensure it remains relevant to current market conditions, meets the demands of employees and enhances their overall employee value proposition.

A benefits program should never be 'set and forget'

As organisations go through change, so should the benefits package that is delivered. A clear example of this is the classic, and dare we call it, 'old school' fruit bowl. As more and more employers move to a hybrid working structure, is this really a great benefit to hold onto? How much return on investment are you getting out of that fruit bowl?

Financial wellbeing in high demand

In our research, employees were asked what organisations can do to support wellbeing, and 'financial support' was the second most requested action behind work-life balance. While employers should aim to be market competitive when it comes to remuneration, there are also other ways employers can support employees financially. This includes the introduction of a financial wellbeing programme that is relevant, flexible, communicated well and reviewed. One size does not fit all so it is important for employers to have an understanding of their workforce.

The top three take-outs from our research are:

  1. Less than 60% of employees are satisfied with their personal finances1
  2. Financial wellbeing declining at a faster rate than mental health1
  3. Over half of employees rate financial education and management resources as an important benefit, yet only a third are currently provided these by their employer.1

What does an ideal financial wellbeing program look like?

By understanding that every person's financial journey is unique, the best financial wellbeing programs include:

  1. Financial education resources — this in turns improves financial literacy and skills for both short-term and long-term needs
  2. Financial benefits — short-term incentive, monetary awards, a 'tailored' employer default super plan
  3. Financial coaching — provided to help employees develop a better understanding of achieving their financial goals; short-term and long-term
  4. Financial counselling — helping employees understand their relationship with money can go a long way to helping employees better manage their finances
  5. Customisation — a great program will not be a 'one size fits all' solution. Any program must cater for different communication styles, demographics, geographies and more. Flexibility is key.
  6. Compliance — ensuring any program is compliant with regulations related to employee benefits and financial wellbeing.

Benefits of a financial wellbeing program

A financial wellbeing program can be a valuable investment in the long-term health and success of both employees and employers. A great financial wellbeing program will provide benefits to the employer as well, such as:

  1. Reduced financial stress in the workplace — this reduces issues with presenteeism and sick leave
  2. Enhanced employer branding — offering a powerful financial wellbeing package in the workplace can strengthen your brand and become a competitive differentiator in a competitive talent market
  3. Improved job satisfaction and retention — when employees feel supported, they are less likely to leave
  4. Cost savings — introducing a benefit that is not dependent on a per headcount basis may be a more sustainable benefit in the current climate.

Employers who encourage open communication about financial issues and create a supportive workplace culture to guide employees through financial uncertainty will undoubtedly see both a competitive and commercial advantage through; improved productivity, job satisfaction and employer advocacy and employee wellbeing. People with high wellbeing report they are 2.3 times more engaged at work, 1.7 times more likely to stay with the employer and 1.5 times more likely to go above and beyond.

So as an employer, what next?

  • Review your remuneration and financial wellbeing benefits offering internally and externally, to understand what your current and future workforce value, and what your competitors are doing. Anticipating and addressing what your workforce wants is key to attracting and retaining talent.
  • Ask your current employees what is important to them. Don't be afraid to ask, but if you ask, you must act and maintain lines of open communication.
  • One size does not fit all. Understand what the different segments of your current and future workforce value, and support them to access the financial wellbeing offerings that are meaningful to them.
  • Ensure you are meeting your employees' fundamental needs for pay, safety, health and wellbeing, and working practices, before focussing on the more exciting aspects of employee value proposition. If your employees are in survival mode, other initiatives will not have an impact.

How Gallagher can help

Find out more about how a multifaceted approach to wellbeing can help mitigate financial concerns in our new Workforce Trends Report: Workplace Wellbeing Index or speak to a Gallagher consultant about refining your employee value proposition and wellbeing strategies.

Source

1Gallagher Workforce Trends Report: Workplace Wellbeing Index, May 2023

Disclaimer

The information and any advice in this flyer does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. When considering whether to acquire a financial product, before making any decision, you should obtain the relevant product disclosure statement.

MORE NEWS & INSIGHTS