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The COVID-19 pandemic has led to significant financial challenges for Brits. From rising inflation and job insecurity, personal finances have become increasingly important topic. Employers are recognising the importance of supporting the financial wellbeing of their people.
In this guide, we’ll explore how employers can better support employee finances. We'll also discuss the role of payroll software in this.
What is employee financial wellbeing?
Employee financial wellbeing means ensuring workers feel they can manage their money effectively. It is about ensuring they feel secure and can support themselves and their families. This includes covering daily expenses, long-term commitments, unexpected costs, whilst saving for the future.
While often overlooked in HR strategies, prioritising financial well-being can benefit businesses. By addressing employees' financial concerns, companies can:
- Improve employee engagement
- Boost productivity
- Increase brand loyalty and employee retention
Do employers have a responsibility to support the financial wellbeing of employees?
Part of being a responsible employer is ensuring that your employees are compensated fairly for their work. In the UK, this means:
- Meeting or exceeding National Minimum Wage rates
- Complying with the Working Time Regulations
- Providing accurate pay slips for employee records.
As an employer, you’re also responsible for the wellbeing of your employees while they’re at work. This means supporting both their physical and mental wellbeing.
Many companies offer mental health programs and comprehensive healthcare plans to improve employee well-being. However, prioritising financial wellbeing protects your workers' health, while ensuring compliance with employment regulations.
How can payroll software improve financial wellbeing?
Since payroll processes are directly responsible for compensating workers, they play a critical role in your employees finances. It’s therefore important to make sure that these processes are as efficient as possible. This means ensuring the accurate, timely payment of wages.
Implementing the right payroll software offers a wide range of benefits. These benefits include helping you to optimise the end-to-end process, keeping employees happy and minimising the risk of financial stress. Let’s look at these benefits in more detail.
Ensures reliable, regular pay
One of the biggest advantages of using software is the ability to automate the payroll process, ensuring that employees are always paid on time. This reliability is crucial for reducing financial stress among employees, giving them the peace of mind that they will receive a consistent salary.
Automated systems reduce the chances of human error and allow you to schedule payroll in advance. This helps to avoid the risk of missing payment deadlines, and minimises the impact of absences or busy periods in the payroll department.
Supports payroll compliance
A key responsibility for HR and payroll departments is staying up to date with the ever-changing employment laws. Failure to keep on top of these changes could mean errors that lead to employee dissatisfaction, and may even result in your business facing fines or legal action.
Payroll software often includes built-in payroll compliance tools to ensure that employees are paid in line with all relevant regulations, such as minimum wage laws, tax obligations, and working hours. This helps to ensure that workers are compensated fairly and accurately, even when dealing with complex organisational structures and a variety of employment classifications.
Gives employees financial autonomy
Payroll software can empower employees by giving them ownership of essential payroll-related tasks. Self-service portals allow employees to view their payslips, submit timesheets and update their personal and payment information themselves. This increases the speed and accuracy of these processes, minimising errors and delays that could cause employees to be underpaid or paid late.
This level of transparency helps employees feel more in control of their financial situation, fostering trust and reducing confusion about payments or deductions. By offering easy access to financial data, payroll software supports financial autonomy and helps to boost employee confidence.
6 ways employers support employee financial wellbeing?
Effectively supporting financial wellbeing for employees is becoming increasingly important for businesses. By actively addressing real financial concerns, employers can help to reduce stress, improve job satisfaction, and boost overall productivity. Here are several key ways employers can foster healthier finances for their workforce.
1. Normalise conversations about financial wellbeing
Creating a culture where employees feel safe discussing their financial concerns is essential. Encouraging open communication about finances helps break down barriers and reduces the stigma around this topic. Leveraging informal communication in the workplace allows for more casual conversations that can lead to early intervention and increased support when employees are facing difficulties with their finances, or any other issues that could impact their overall wellbeing.
2. Identify the financial challenges your employees face
Understanding the specific financial struggles that your employees encounter is the first step to providing meaningful support. Pulse surveys are a great tool for gathering quick feedback and identifying issues relating to financial wellbeing. These insights can inform your decisions on what actions to take, and how you can create HR strategies to provide the support your employees actually need.
3. Put new processes in place to support financial wellbeing for employees
Once you’ve identified the financial challenges your employees face, it’s important to implement effective solutions. As well as optimising your systems to minimise payroll errors and increase efficiency, this could mean improving HR processes on a larger scale. Some HR strategies focussed on financial wellbeing for employees include expanding benefit packages to meet the needs highlighted by your employee surveys, or providing self-service tools that allow employees to access their financial data.
4. Educate employees about financial wellbeing
Offering courses on financial management can help employees to better understand their options and make informed decisions about their finances. Providing access to relevant e-learning resources as part of your learning and development initiatives can equip your team with the skills and knowledge they need to make the most of their pay cheques. This empowers them to take control of their financial future, while also increasing employee satisfaction and motivation.
5. Promote internal and external support systems
Make sure to communicate where to find both internal and external resources to support employee financial wellbeing. This could include employer-sponsored financial assistance programs, as well as external resources like government support. It’s also a good idea to highlight any relevant employee benefits, including discounts, savings schemes, pension plans or money management apps. Promoting these different types of support ensures that your employees know where to get the information they need, and where they can turn if they’re facing financial difficulties.
6. Monitor and optimise employee financial wellbeing
Supporting financial wellbeing for employees is an ongoing process, particularly as interest rates and the cost of living are continually in flux. Regularly check in with your employees to review the effectiveness of any initiatives you’ve put in place, and make changes as necessary. Improving payroll processes and other HR functions will ensure that your support systems remain relevant and effective as the needs of your employees and the financial landscape change.
Unlock greater financial wellbeing for employees with PeopleHR
Supporting the financial wellbeing of your employees is crucial for fostering a healthy, productive workplace while ensuring that your business is operating in line with UK employment laws. By implementing strategies such as normalising conversations about financial issues, identifying challenges and providing access to educational resources, employers can give employees the tools they need to make the most of their finances.
Optimising HR processes and payroll systems is essential for ensuring that employees are compensated fairly and on time, reducing stress and improving job satisfaction. Cloud-based payroll software plays a pivotal role in this process by automating payments and ensuring compliance with regulations, which ultimately streamlines the payroll experience for both employers and employees.
To see how PeopleHR can transform your payroll operations, check out our demo or feel free to contact us to discuss the specific needs of your business.
