Financial wellbeing: unpacking the employee experience

The ever-rising cost of living, coupled with economic uncertainty, has posed significant risks to employee financial wellbeing.

I urge employers to consider financial wellbeing with greater care, as it extends far beyond simply paying wages.

We recently ran a survey of 1,000 UK workers to better understand their financial position, uncovering that many are regularly relying on debt and struggling to save.

In this blog, I’ve unpacked a few of the key findings from our survey, helping paint the picture of how workers are currently faring.

Struggles with saving  

Over half (55.49%) agree it’s challenging to be consistent with saving money.  

However, demographic insights highlight that younger respondents are struggling even more – those aged 16-24 (66.23%) and 35-44 (63.64%). 

In contrast, older employees (55+) are more financially stable, possibly due to having fewer financial obligations or more established savings habits, with only 43.42% agreeing and a notable 39.91% disagreeing with the statement. 

This data underscores the importance of offering financial support that addresses the various challenges faced by different age groups.  

Regular debt

Despite 78.94% of employees expressing high financial confidence, they rely on debt (credit cards, Buy Now Pay Later, overdrafts or loans) an average of 7.24 times per year to bridge gaps before payday.  

Looking at the demographic insights, this becomes increasingly concerning, as the 25-34 age group is struggling even more, with 82.76% of them having used debt in the past year.  

This reliance on debt can perpetuate a cycle of financial stress, particularly if high-interest rates or fees are involved. 

However, financial stress isn’t just an issue for employees to deal with. 

With it impacting productivity, mental health and staff retention, pressure is on businesses to act and support their people if they want to truly thrive. 

Little reliance on employers  

When facing financial difficulty, research found that only 3.3% would turn to their employer, with the vast majority relying on partners (32%) or family (15%). 

The low percentage of respondents (3.3%) who would turn to their employer for financial support highlights a significant opportunity for businesses to step in and support their employees as part of a benefits package.  

Offering greater financial support could help build trust, improve employee wellbeing and differentiate businesses in a competitive job market.  

I’d also like to flag that 10.58% of respondents said they’d not turn to anyone. 

It’s incredibly concerning that a segment of the workforce may feel isolated or lack access to financial support.  

This further highlights the business case for employers to create a supportive environment and offer additional assistance.  

Building a financial wellbeing strategy

Financial stress impacts productivity, retention and engagement, with rising living costs intensifying these issues.

Clearly, there’s a need for action.

Here are five steps to take when developing a financial wellbeing strategy.

1) Set your direction

Building a compelling business case for financial wellbeing support can help set a clear direction for your business, fostering understanding among leaders and key stakeholders.

As a starting point, benchmark against competitors, address leadership priorities and outline the costs/risks of inaction.

2) Identify those at risk

Avoid assumptions and engage with employees directly to identify those most at risk of financial stress.

Normalise having conversations about money and encourage managers to speak with their team, ideally in a one-to-one setting, or for a less direct approach, use surveys to gauge overall sentiment.

Also, keep an eye out for indicators of financial stress, which can include:

• Increased absences
• Presenteeism
• Reduced productivity
• Mood changes
• Delayed retirement plans

Business leaders and managers must be equipped to recognise signs of poor mental health and financial stress.

3) Take action

While pay increases or bonuses may not always be viable, ensuring a fair wage should be a key goal.

Additionally, other measures include:

• Financial education
• Warning against scams
• Earned Wage Access (EWA)
• Travel loans or discount vouchers
• Flexible working to reduce costs
• Occupational sick pay
• Crisis loans for emergencies

These targeted actions can provide meaningful support to employees facing financial difficulties.

4) Communicate

Now that your strategy is in place and actions have been decided, communicate the plan with your workforce.

Use a range of channels like emails, meetings, direct messages, intranet and even printed materials.

Also, encourage open dialogue about financial challenges to help reduce stigma and foster trust.

5) Review

The final step is to evaluate your efforts and identify areas for future improvement.

Measure how valuable it’s been for staff, looking at metrics such as:

• Participation in programmes
• Benefit uptake
• Employee engagement
• Data from surveys

Regularly reviewing enables you to refine initiatives, address gaps and introduce new enhancements.

Desire for Earned Wage Access

Earned Wage Access, also known as On-Demand Pay, allows employees to withdraw a portion of their already-earned wages before their scheduled payday.

Our survey revealed that two-thirds (66.7%) of workers say they would use Earned Wage Access if available, with 22% opting for weekly usage. 

Almost half (47.9%) of respondents also said that EWA makes a job more attractive, with the number skyrocketing to 55.84% for those aged 16-24 and 65.52% for 25-34. 

The data highlights a significant demand for EWA.

For these workers, EWA offers a practical solution for reducing reliance on high-interest credit options. 

How Earned Wage Access works

To offer On-Demand Pay, you need an Earned Wage Access platform that syncs with your current payroll software.

Once implemented, employees complete their shifts as normal, accumulating earnings.

Employees can then access their funds – often up to 50% of their accumulated pay – almost immediately or within a few hours via a mobile app or online platform.

When payday arrives, the advanced amount is subtracted from their regular salary, along with any applicable fees.

Partnering with Level to offer On-Demand Pay

We’ve partnered with leading On-Demand Pay provider Level Financial Technology to bring the feature to our payroll and HR software users. 

Via this partnership, data is seamlessly synced between IRIS and Level to automate Earned Wage Access for staff.