Claire McCartney: What aspects of financial wellbeing matter most to employees?


The twice yearly Chartered Institute for Personnel and Development (CIPD) and Halogen Employee outlook survey of more than 2,000 employees investigates the key workplace issues from their perspective. For the first time, the latest autumn survey, published in November 2016, explored employee financial wellbeing, which we define as a state of both emotional and physical wellbeing, produced by a set of conditions and abilities. It includes making the most of an adequate income to enjoy a reasonable quality of life and having the skills and capabilities to manage money well, both on a daily basis and for the future.

Financial security of employees

When considering how financially secure employees feel, compared with the start of 2016, almost half of employees feel that there has been no change. Of those that have experienced some change, they are fairly evenly split on whether they feel less or more financially secure. The survey also asked employees to try to anticipate their financial security in the next 12 months. Again, almost half felt there would be no change and, interestingly, from a positive perspective about the future, slightly more employees anticipate being more rather than less financially secure.

The most important aspects of financial wellbeing for employees

The aspects of financial wellbeing most important to employees are: earning a sufficient wage to enjoy a reasonable lifestyle (75%), being able to save for the future (55%), and feeling that they are being rewarded for their efforts in a fair and consistent manner (54%). Almost half of employees also point to the importance of being able to comfortably pay off existing debts.

Public and voluntary sector employees are significantly more likely than private sector employees to say that they want to earn a sufficient wage to enjoy a reasonable lifestyle and that they would like opportunities to develop and progress their careers. Public sector employees are also much more likely than private sector employees to say that they would like staff benefits that protect them and their family should they fall ill or lose their job. These findings are unsurprising given the impact of austerity measures on the public sector and the expected continued restraints on budgets in this sector.

Measures to improve financial wellbeing

When it comes to measures that could be made to improve their financial wellbeing, employees are, perhaps unsurprisingly, most likely to say they would like higher wages. Employees in the public sector are significantly more likely than those in the voluntary and private sector to say that they would like to earn a higher wage.

Employees also say that their financial wellbeing would be improved if they were rewarded in a fair and consistent manner (41%), to be able to save for the future (26%), and finally to have protection for themselves and their family if they were to lose their job (24%). These are all reasonable and practical expectations on the part of employees and it is important that employers are being open and fair with employees and doing what they can to support their financial wellbeing.

Advice for employers

So, who should have responsibility for employee financial wellbeing? The CIPD’s Employee financial wellbeing: why it’s important report, published in January 2017, recommends that all stakeholders have an important part to play in employee financial wellbeing because the potential benefits are so great. Boost financial wellbeing and we can improve performance. Improve performance and employers will have more money to invest in their employees through higher pay, better benefits, and more training and development.

When focusing on employees’ financial wellbeing, employers should consider: paying a live-able wage or more is an important component in employee financial wellbeing; reviewing existing reward practices to see whether these support employer and employee needs in a fair and consistent manner; looking at whether staff benefits are helping employees achieve financial wellbeing and investigating what needs to be introduced, improved or scrapped and looking to offer financial education as part of wellbeing programmes, which is tailored to different demographics and employee life stages.

Claire McCartney is associate research adviser at the Chartered Institute for Personnel and Development (CIPD) and director at Inclusive Talent