The transformative power of corporate financial wellness

The ter­ror-strick­en diary of a mil­len­ni­al is now a per­ma­nent fea­ture of news­pa­pers, along with the foot­ball scores and obit­u­ar­ies. A recent Guardian col­umn by the elo­quent jour­nal­ist Juliana Pisko­rz was a clas­sic of the genre.

“I am 25 and a half, sin­gle, unable to pay my rent and the clos­est thing I own to a car is a bro­ken skate­board,” wrote Ms Pisko­rz. “It seems too old to still be liv­ing at home, for your card to be declined buy­ing loo roll.” Just think­ing about her sit­u­a­tion trig­gered waves of adren­a­line. “My head began to spin, a famil­iar tight­ness seized my chest and the sweat glands in my palms went into over­drive, sig­nalling the begin­ning of a pan­ic attack that would last the best part of the day.”

It’s no way to live. Mr Pisko­rz found a crumb of solace by talk­ing to a psy­chi­a­trist, who helped her make sense of soci­etal changes and how she saw her place in it. The themes are peren­ni­al: the replace­ment of a job for life with job hop­ping; the decline of entire indus­tries includ­ing jour­nal­ism; and the malev­o­lent impact of social media, com­par­i­son being the thief of joy.

Financial wellness could be secret to productive employees

But anoth­er source of advice might help too. A cor­po­rate finan­cial well­ness ser­vice. This isn’t face­tious. Com­pa­ny advis­ers are now on the front line of help­ing employ­ees make sense of a chaot­ic finan­cial world. Even low-wage work­ers may find their employ­er takes an active role in help­ing them han­dle their finances.

“Com­pa­nies know that there is a clear link between employ­ee con­tent­ment and pro­duc­tiv­i­ty,” says Dami­an Stan­combe, head of work­place health and wealth prac­tice at Bar­nett Wadding­ham, a cor­po­rate pen­sions and invest­ment con­sul­tan­cy. “So the trend is for com­pa­nies to think about the wider finan­cial well­ness of staff. They are bound by law to auto-enrol staff into a pen­sion, but the best are expand­ing beyond that. For exam­ple, by pro­vid­ing a debt con­sol­i­da­tion ser­vice.

“About a quar­ter of employ­ees are strug­gling with what they see as prob­lem debt, so a com­pa­ny-sup­plied con­sol­i­da­tion ser­vice can be of real val­ue. Pay­ments can be made from pay­roll at advan­ta­geous rates, so it’s a real ben­e­fit for staff.”

A com­pa­ny can encour­age staff to think about how they save. Employ­ees often won­der whether to save in a pen­sion or an ISA. A com­pa­ny is in a great place to pro­vide infor­ma­tion to employ­ees, who oth­er­wise have lit­tle appetite to organ­ise their finances.

Online services are the first step to greater financial wellness

The fact that employ­ees need more infor­ma­tion about their finances is clear. A sur­vey by YouGov shows around half of peo­ple in the UK are total­ly or par­tial­ly unsure whether they are putting enough into their pen­sion. Only 6 per cent are “def­i­nite­ly” sure they are sav­ing enough. Mean­while, half of mil­len­ni­als with a work­place pen­sion strug­gle to under­stand their scheme, accord­ing to Pru­den­tial. Cor­po­rate finan­cial well­ness is a con­cept designed to improve both aware­ness and the action tak­en by employ­ees to improve these num­bers.

Online ser­vices are a grow­ing part of the well­ness equa­tion. A human con­sul­ta­tion can be pro­hib­i­tive­ly expen­sive, but online “robo-advis­ers” are a game-chang­er, mak­ing it pos­si­ble for every­one, no mat­ter what hours they work, to access decent advice. Employ­ees answer ques­tions via a web brows­er to see whether their con­tri­bu­tion lev­els are on track and how a change would affect income when they retire. The method is ide­al for any­one too time-poor or ner­vous to vis­it a human pen­sion advis­er or sim­ply who enjoys a quick pen­sion review every so often.

The ser­vice is usu­al­ly free to employ­ees; the bill is paid by com­pa­nies who want their staff to feel con­fi­dent about their mon­ey.

Com­pa­nies are think­ing cre­ative­ly about how to help employ­ees save mon­ey. Bar­nett Wadding­ham, for exam­ple, offers staff access to an online dis­count shop­ping ser­vice sup­plied by Sodexo. Around 5 per cent can be saved on super­mar­kets, restau­rants and high street chains. Around 70 per cent of For­tune 1000 com­pa­nies offer staff an online dis­count por­tal.

The rules of retirement are shifting

Also, com­pa­nies can even help staff reflect on the con­cept of retire­ment. The old rules said you retire at 65. But in the past five years there’s been rad­i­cal rethink. For­mer pen­sions min­is­ter Ros Alt­mann is lead­ing the cam­paign to decou­ple the pen­sion age from the retire­ment age. In a nut­shell, you can, if you desire, keep work­ing after the date when your pen­sion kicks in. Either enjoy the extra income or defer the cash and swell your pen­sion pot.

The incen­tive for com­pa­nies to offer advice to employ­ees on their retire­ment age is clear. The Nation­al Insti­tute of Eco­nom­ic and Social Research sug­gests that if peo­ple worked an extra three years, it would add up to 3.25 per cent in real GDP every year. Not only is the work­force larg­er, but younger employ­ees ben­e­fit from the men­tor­ing and pro­duc­tiv­i­ty of their old­er col­leagues. That “per year” claim needs high­light­ing. It’s enough to cat­a­pult the UK into tiger econ­o­my sta­tus, rad­i­cal­ly improv­ing job oppor­tu­ni­ties and salaries for younger work­ers.

Above all, cor­po­rate finan­cial well­ness ser­vices are blos­som­ing because com­pa­nies under­stand that hap­py employ­ees will be more hard work­ing. Both par­ties gain. Wor­ried employ­ees get advice, plus help­ful ser­vices to improve their finan­cial life. And com­pa­nies get calmer, appre­cia­tive work­ers.

It’s ear­ly days for the con­cept of cor­po­rate finan­cial well­ness – even the name is a bit clum­sy – but the demand and log­ic for it are unde­ni­able.

Financial wellness could be secret to productive employees

Online services are the first step to greater financial wellness

The rules of retirement are shifting