Author Name: Tracey Ward, Head of Business Development and Marketing at Generali UK Employee Benefits
Sickness absence seems an even bigger issue than usual right now. Although official data is not yet available, media reports of some big companies saying they will only pay the legal minimum – as opposed to full sick pay – to unvaccinated staff if they have to isolate due to Covid-19 exposure, demonstrates the pressure on employers.1 Meanwhile, for employees, all of this is only serving to add to all the change and perceived uncertainty currently faced in their working lives, not to mention the very tangible pinch as UK inflation hits a 30 year high.2
So, against this backdrop, what can employers realistically do to help, in terms managing the wellbeing and motivation of their dispersed workforces, while also trying to keep the wheels turning and the costs down?
We spoke to two of Generali UK’s financial wellbeing partners – Wagestream and Close Brothers – to ask whether they had noticed any trends in demand by employers and employees for their various services.
90% planning a FinWell policy
There’s been a surge of employers investing in employee financial wellbeing programmes over the past 12 months, according to Emily Trant, Head of Impact and Inclusion at Wagestream. “But the even bigger change is yet to come. We recently surveyed 600 HR Directors for our upcoming State of Financial Wellbeing report and found that among those without a financial wellbeing policy, more than 90% plan to put one in place over the next 18 months”, says Trant.
Trant says that employers are now taking a more holistic view. “Employers are recognising, in particular, that financial wellbeing programmes need to focus on short- and long-term wellbeing. Replacing locked pay with flexible pay is increasingly seen as the core of this, with benefits being built around pay.
“Pensions are still ticking the long-term box for many employers, so now the focus is switching to areas like education and salary-deducted savings – bridging short with long-term financial wellbeing, for example, by making it simple for employees to build up savings pots.
“The impact of that will be huge, when you consider that 20% of UK adults don’t have enough savings to withstand a small ‘financial shock’ of £50. In those instances, the employee and employer both suffer – so it’s great to see employers stepping in to play a supportive role in a way that benefits everyone.”
One size doesn’t fit all
Similarly, Close Brothers has found that due to Covid-19 and the spotlight it has shone on personal finances, employers have identified that there are often various strands to a successful financial wellbeing strategy. And financial education underpins everything.
Matthew Allen, Director – Financial Education Services at Close Brothers Asset Management, commented: “Whilst some may have provided workplace loans and/or salary advance schemes etc, we’ve seen a rise in demand for true education to complement existing strategy. In particular, live webinars delivered by qualified advisers in an unbiased way, to truly educate employees on personal finances.
“We’ve found that our career stage webinars have been most requested, ensuring all employees, regardless of their age, career stage or wealth level have a presentation relevant to them, complimented by shorter presentations targeting certain cohorts – for example, retirement planning and annual allowance or lifetime allowance presentations. Access of course has had to be through digital mediums to accommodate for flexible working arrangements, which look to remain in some shape or form for the foreseeable future.”
Lean on existing providers
Meanwhile, group income protection has a significant role to play in keeping sickness absence costs down and wellbeing up. And it is no longer just the preserve of the privileged few as employers realise the important role it has to play in covering their absence costs, while also providing essential early intervention and rehabilitation support to employees.
This includes, in some cases, funding support by the insurer to pay for specialist wellbeing services, such as those provided by Wagestream and Close Brothers, that might fall out of the traditional group income protection remit, but could bring considerable value to the client.
7 in 10 (70%) of those employers with group income protection in place now fund it for all employees, according to data from Gallagher’s 2020 Benefits Strategy and Benchmarking Survey Report.3 This is an increase on 57% in 2019. Others use criteria such as job level or category or tenure to determine eligibility.
1 in 5 receive more than 75% of salary, across all classifications (job level or category), according to Gallagher. This represents a significant shift from the previous year’s survey when just 1 in 10 ‘operatives’, ‘business support staff’ and ‘line managers’ received cover of more than 75% of salary. According to the report, Covid-19 could have impacted this shift, along with a push for fairness in the workplace.
BBC, John Lewis says it is wrong to cut sick pay for unjabbed staff, Jan 2022 https://www.bbc.co.uk/news/business-60105216
House of Commons Library: Consumer prices, as measured by the Consumer Prices Index (CPI), were 5.4% higher in December 2021 than a year before – the highest inflation rate recorded since 1992 [Accessed 28 Jan 2022] https://commonslibrary.parliament.uk/research-briefings/cbp-9428/
Gallagher, 2020 Benefits Strategy & Benchmarking Survey Report https://www.ajg.com/uk/benefits-strategy-and-benchmarking-report/