Financial Wellbeing Archives

As we enter the new year, many employers are conducting end of year pay reviews for their employees. This year’s pay trends are likely to differ from previous ones due to a variety of factors which may influence how leaders and workers approach their compensation strategy in the coming twelve months. Considering that a recent study by Willis Towers has revealed that 75% of organizations are struggling to win over new talent, it is critical for companies to actively improve their compensation IQ in order to be a viable talent competitor.

As there is a clear need for employers to improve their compensation IQ in 2023, consider the following trends that are rising in the compensation space as your organization looks into how best to reward talent.

Salary Budgets are Rising - A recent report from Salary.com has found that the long-predominant 3% raise has been replaced by a median raise of 4% across all employee categories, breaking the more than 10-year trend of stagnant projected salary increase budgets. A quarter of employers even plan to offer increases between 5-7% this year, marking 2023 as a ‘banner year’ for compensation. It’s good to keep in mind the careful balance organizations will have to strike so as to meet the talent market demands to competitively compensate the workforce in 2023, all while striving for positive financial performance in a difficult economy.

Data Based Compensation Decisions – Those employers who have limped along without clear salary guidance or practices in past years may find it increasingly difficult to continue down the same path. Now is the time to put in the hard work to build a compensation structure if your organization has been navigating compensation without defined salary ranges. In a data-driven world, employers who leverage competitive salary ranges will find that making data-based compensation decisions for new hire offers, promotions, annual increases and other pay adjustments have an advantage when it comes to attracting and retaining talent while avoiding other pay-related issues such as salary compression and pay equity issues.

Pay Transparency – Across the board, pay transparency is becoming a hot topic, and if there was a single reason to establish salary ranges, as mentioned above, pay transparency is it. Employees want to work for organizations who are transparent about pay. With the UK’s launching of a pay transparency pilot program and pay transparency legislation beginning to be enforced in multiple US states, it is looking as if being open and honest about compensation is going to become more than an expectation but rather the norm. Doing the work now to establish transparent pay practices and guidelines will help you to, if not get ahead, at least not fall behind the curve of the burgeoning pay transparency movement. You will also be demonstrating to the talent market that your organization values pay equity and equality.

Pay Communication – How members of the organization discuss pay can be as important as the pay itself. Communication is everything. Now more than ever, organizations should be devoting time to train leaders about how to have effective compensation discussions. Being able to articulate why someone is receiving an increase and how the amount was determined is something that employees want and deserve to know. This means detailing the rationale behind data-based compensation decisions and knowing the difference themselves between pay adjustments, merit increases, lump sum payments, and so on, and why we allocate one over another depending on the circumstance. Educating your HR team, especially Talent Acquisition, is also critical to ensure the organization is painted favourably with fair offers and a well-articulated total rewards package. To be effective in bringing candidates in the door, recruiters must know how to effectively leverage salary ranges and formulate an offer based on the candidate’s experience and alignment to the open role, as well as understanding the current compensation elements someone may be leaving behind. Investing time in proper training helps to foster trust in new and current employees, and will demonstrate why your organization is an attractive place to work, while reminding those who already work for you why they want to continue doing so.

Geographic Pay Policies – With the rise of remote and hybrid working arrangements, geographic pay differentials are becoming a more prominent topic of discussion, and a highly complex component of compensation. It can be difficult to determine how to approach compensation for people who are performing the same work from different places or if it makes sense to differentiate compensation between remote and on-site workers in areas with different costs of living. Borderwork’s Geographic Pay Policies study found that of the 62% of organizations with existing geo-pay policies, 44% of them are considering modifying or have modified their policies due to the increase in full-time remote work. There is a growing need to develop strategies to navigate this in the coming year as inflation continues to impact the cost of living and the concept of how we work continues to evolve.

Getting Creative - Compensation is both a science and an art. Creative solutions to compensating the workforce are always worth exploring. Effective compensation programs require that you compensate the right people, at the right time, at the right level, in the right way. Creative solutions will be circumstantial but could include some of the following to effectively attract or retain the right talent: establishing new and innovative incentive programs, re-thinking employee recognition, improving leverage of sign-on and retention bonuses, offering sabbaticals, 4-day workweeks or instituting programs to emphasize your company’s commitment to making a positive social and/or environmental impact, just to name a few.

Making the effort to invest in improving your compensation IQ as an employer can be the differentiating factors when it comes to your talent strategy in 2023. Amongst the rising inflation rates, the cost-of-living crisis and changing attitudes towards work, understanding how to leverage compensation as a way of making you stand out will help ensure you are bringing in the right people. To discuss growing your compensation IQ or reviewing your compensation strategy in more detail, get in touch with me at alisa.cardenas@orgshakers.com

The holiday bonus is carrying a lot more weight this year. With financial concerns at an all-time high, many employees may find themselves eager to receive an additional monetary gift more than ever this holiday season. And while WorkNest found that nearly a third (30%) of employers are planning on giving staff one-off bonuses, this still leaves a majority of companies who either do not have the means to offer one or have not considered it.

However, an end of year bonus doesn’t necessarily have to be money. Whether you are a small organization who cannot afford to offer gifts, or you would like to give something a little different this year, here are some fun and cost-friendly alternatives to show employees gratitude this time of year:

Gift card and handwritten note – it does not have to be a high dollar value, but it will still help leaders convey appreciation for their teams. A small Starbucks gift card and an accompanying, individualized note can easily put a smile on someone’s face, especially when they treat themselves to a holiday beverage.
Or even just a card – if the budget is very tight, even a heart-felt card to each member of staff helps to show the appreciation being held for them. Taking the time to write each one and add in a unique detail will demonstrate how well a manager knows their employees and will make them feel seen and valued.
Get creative – Leverage your creativity and gift something handmade to your employees this holiday season. If you are a business that operates remotely, use your design skills by putting together fun, personalized backgrounds for each team member. Use the background to showcase positive feedback or accomplishments highlighting employees’ most impactful achievements throughout the year. Handmade gifts are one of the best ways to show gratitude for your team. The time dedicated to each individual’s gift speaks volumes about your commitment and appreciation.
Virtual holiday party – if the budget for an end of year staff party is tight, then why not consider hosting it online? Encourage those that wish to attend to slip on a quirky jumper or ugly sweater, change their Zoom or Teams background to something from their festive beliefs and host a virtual game of Jeopardy or Who Wants to be a Millionaire? to get everyone involved. Check out our tips and tricks for hosting a fun and appropriate holiday staff party here!
Host an awards ceremony – Take a new twist on things. A team awards ceremony is a great activity that can be done in person or online. To coincide with awards season, why not set up your own mock red carpet? Whether you deck out with a buffet and drinks or just keep it simple, this is an innovative way of showing gratitude to your team and gives you the opportunity to have a good laugh as a team with fun awards!
Or, if you do have more of a budget…there are a variety of things that can be offered in exchange of a monetary bonus that can prove to be more thoughtful and sincere, while still being relatively budget friendly. For example, planning an activity to do together, such as a curated beer/wine tasting (in person or virtual!) or something more physical (bowling, escape room). And, if you are a remote company, there are plenty of virtual experiences that everyone can take part in – this could be anything from a virtual cooking class to an interactive online murder mystery party.
Make it meaningful – Those looking to give back to the community whilst providing a cheery team building experience this season should consider stepping away from the office and volunteering together. Employees can appreciate the time away knowing it’s for a meaningful cause. Another idea is using a service like Packed with Purpose, which allows employees to curate their own gift box full of a variety of goodies while supporting a variety of social and environmental causes. So, while the gift is thoughtful and individual, it is also having a positive social impact. Demonstrating the company’s alignment with personal values is becoming more attractive to talent, especially across the younger generations in the workforce. Something as simple as making a donation to a charitable organization of an employee’s choosing can go a long way, as it shows how important their social values are to you as an employer. Opting for these more meaningful gifts that give back is an excellent way for companies to demonstrate the investment that they have in their employee’s social values.

Whichever way an organization chooses to show their appreciation for their employees this holiday season, there is one key piece of advice that leaders need to remember:

It’s all about the messaging. As with any reward or recognition, the communication which accompanies the gift is very important. Ensure that any gift, activity or experience substituted for a monetary reward clearly expresses gratitude and shows how you have your employees’ interests front of mind when choosing them. Happy employees will lead to healthy business – and this is the ultimate goal.

If you would like to get in touch or need further guidance on how to approach an end of year bonus, you can contact me at alisa.cardenas@orgshakers.com

As the festive season settles, whispers of the staff holiday party will begin to circulate. A tradition amongst many companies, it is a chance for managers and team members alike to spend some sociable time together without the pressures of work. It can be a great night, but to ensure there are no incoming HR hazards, here are a few tips and tricks we have put together to keep things fun, festive, and appropriate:

Keep cultural traditions front of mind – December is home to many religious festivals, not just Christmas. So, when hosting your staff party, try to be mindful to the diversification of your staff – if you know that there are some who celebrate different festivities, such as Hanukkah or Bodhi Day, then try and incorporate these into the party in some way. This can be as simple as having a variety of decorations from each faith, or incorporating some fun activities from the different holidays (a menorah ring toss can really bring the competitive spirit!). This will ensure that everyone who is participating feels properly included.
Speaking of participation…not all staff will want to attend a holiday party. Whether that be due to prior engagements, not wanting to be around alcohol or simply being introverted, it is important to emphasise to your team that attendance is not mandatory. That said, making the event as inclusive as possible will result in the best turnout!
Exchanging gifts – many employers may want to do a fun gift exchange – whether that be a game of secret santa or white elephant – and this can be a great way of bringing the team together and bonding over some fun. However, it is important to make this a voluntary venture. With the cost-of-living crisis hitting us all this year, some people may not have the means of participating in extra gift giving, and so ensuring that it is known that this is voluntary will help stifle any shame someone might have about not wanting to play. And, if you are a remote company but still wanted to do a gift exchange, you can participate in White Elephant Online by sharing your screen to still get involved with the fun.
Easy on the eggnog – if you are offering alcohol at your end of year party, be sure to have included a set amount in the budget for safe transportation home for all employees. Whether this be through giving everyone Uber credit or reimbursing for train tickets, leaders have a responsibility to ensure the safety of staff. Similarly, when drinking, be sure to make it clear that a certain level of conduct still needs to be maintained.
Show appreciation – a great addition to any holiday party is for leaders to find a way to show how much they appreciate everything their staff has done for them and the company throughout the year. This can be as simple as giving everyone a card, or a small goody bag. Or, if money is tight, it could be in the form of a fun gimmick – if you are serving food at the party, all the managers could be the servers for the night to flip the hierarchy!
It doesn’t have to be a ‘party’ – an end of year celebration can be expensive, and in financially straining times, it can sometimes be difficult to find the means of putting a party together. But this does not mean you can’t come together in different ways. A great counter option is volunteering as a group at a local food bank or charity – the gift of giving back is always a rewarding one, and can help unite you as a team.

However you end up celebrating with your employees, the best things to take away are to be inclusive to all and to make your team members aware of how much you value them. This is a great opportunity to strengthen interpersonal bonds and bring colleagues closer together, and to let your hair down! If you need advice and/or guidance on hosting your holiday party, you can get in touch with me at brittany@orgshakers.com

The recent Wagestream Cost of Living Report 2022 has found that close to all UK employees (96%) have seen their living costs rise and, as a result, 70% now worry more about money.

Three quarters (76%) of those worrying more have seen their mental health decline. Unsurprisingly, therefore, one in five (19%) of those who have asked their employer for support in the last three months asked for help with mental health.

In this podcast, Chris and Adam Morris speak to OrgShakers’ Therese Procter about the report and what businesses can do to help their employees through these difficult times.

You can access the podcast by clicking on the image below:

With the cost of living continuing to rise, supporting the wellbeing of staff has been at the forefront of employers’ minds.

According to a LendingClub report, 64% of Americans are living paycheck to paycheck in 2022, so organizations are trying to support their employees financially wherever they can.

But if you are a small business or a start-up, having the financial means to help your staff may not be possible.

So, what are the other things you can be doing to improve employee wellbeing?

1. Apps to help manage personal finances

Earning money is one thing, but knowing how to manage it is another. There are many apps available for companies to promote to their staff which can help them track spending habits and expenses. Examples of these are Mint (cashflow tracker and planner) and EveryDollar (budgeting and savings).

2. Flexible Spending Accounts (FSAs) and 401(k) loans

Companies can discuss with their investment broker about setting up FSAs for their employees. These are essentially saving accounts to put money aside that is solely for healthcare or dependent care costs. As long as the money in this account is used for eligible medical expenses, the staff member will not have to pay income tax on it.

Alternatively, businesses offering a 401(k)-retirement plan can find out what loans are available to them. This will allow your employees to take a loan out of their retirement money and then pay it back over five years with a low interest rate. What’s even better is that any interest paid goes back into the employees 401(k) fund.

3. Giving employees space

Sometimes, distance can be good. In times of high stress and financial unrest, it can be a good idea to offer working flexibility – hybrid and remote working mean people are more comfortable and spend less time (and money) coming into the office. Not applying extra pressure to attend networking events or other gatherings outside of work can also help relieve stress and allow for a focus on what their job actually is.

4. Subscribing to mindfulness and meditation apps

The Stress in America report from earlier this year found that 87% of respondents were stressed about the rise in prices of everyday items due to inflation. Employers placing a real focus on the mental health of their employees is very important during such an uncertain time, and so organizations can purchase subscriptions to mindfulness apps such as Calm or Headspace to help their staff ease rising stress levels.

5. Discounted/free gym memberships

Physical fitness has been widely known to have mental health benefits, as well as helping to relive stress. Exercise causes the release of endorphins in your brain, which trigger a positive feeling in the body.

6. Talk to your staff

As simple as it may sound, communication is key. Making a conscious effort to speak to your staff and listening to their needs can be extremely beneficial for their wellbeing. For start-ups, being malleable with job roles can help boost engagement while also helping you get off the ground. Where someone may feel they are burning out in one area and someone else is hungry for development in another, this can be used to your advantage by swapping the two. Finding creative ways to improve development and learning is vital during such a testing time.

The cost of living is a sensitive time for all of us. It is difficult to avoid feeling its effects, and so if your small business needs guidance on how to support the wellbeing of your employees, get in contact with me at brittany@orgshakers.com

In June Carers Week 2022 published a report highlighting the challenges facing working carers in the UK.

To discuss the implications for employers, I brought together Vivek Patni, CEO of care service access provider WeMa, and Max Lintott, UK General Manager of financial wellbeing platform Wagestream.

Both WeMa and Wagestream are actively engaged in helping working carers cope with the burden of caring for sick or elderly relatives, and their perspective on the report’s findings were enlightening and provocative!

Here is a brief extract from our conversation:

Therese

One statistic that stood out to me in the Carers Week report is that workers on lower incomes are disproportionately impacted by the need to provide unpaid care for a loved one – 34% of carers with an annual household income of £20,000 or less are caring for over 20 hours a week, compared to 24% of carers from higher income households.

For me that cuts right to the heart of why employers need to help their people on lower incomes access services and manage their day-to-day finances.

Because you're more likely to face mental health issues due to your inability to be able to get the help you need, or to speak up about the problems you’re facing, because of the fear of losing your job, or whatever it might be.

Vivek

I think there are two angles to this.

Firstly, the number of people now caring for their family has significantly increased; there were 4.5 million additional informal carers in the UK in the 6 months from the start of Covid back in early 2020 (2.6 million of these were working carers). Did you know, by 2025 there will be more adults of working age with adult dependents compared with child dependents?

As well has having little knowledge of how to care, finding time to do so around work, and not being paid for the care they deliver, two-thirds of these carers are in fact using their own income and savings to cover the cost of care for their loved ones, 40% of which are struggling to make ends meet. It's these people that we're really trying to support with the WeMa service, because they're struggling massively.

Secondly, there’s the shortage of professional care workers – and the challenge you've got there is that it’s a very low paid job. This is one of the biggest factors as to getting more people coming into those jobs, but it’s also a very difficult, demanding job which must be respected much more than it currently is. The lack of professional carers puts more pressure back on the informal carer.

To build on what you were saying about the impact on these people, Therese, other research has shown that 54% of carers suffer from negatively impacted financial wellbeing, 70% suffer with mental ill health, and 60% struggle with physical ill health due to the burden of delivering that care.

Max

Add to that the fact that the Carers Week report says that more than 10.5 million adults in the UK are now acting as unpaid carers. I mean, there are only 12 million frontline workers in the UK and there are only around 30 million employees in all, so around a third of the total workforce are impacted by this.

And the burden will often fall on lower-income households which aren't given access to affordable private healthcare to help.

Vivek

I think that’s why this conversation is really timely. If you look at the social care market, everyone's trying to figure out how are people going to fund their care moving forward, because they'll definitely be a very limited amount of money going into it through the state.

The cost per hour of privately funded homecare can range anything from £19 to £30 per hour - the average is estimated to be £21.50. So, based on 2 hours a day, 5 days a week of care required for an individual who's got, say, early-stage dementia, that's about £13,500 a year.

So, the question is what kind of support can we put in place around access to care services and the finances to pay for that care?

Therese

We also have to remember that some of that support is short term. If an elderly relative has just come out of hospital I don't need six weeks off, but I desperately need two or three days.

So, I think the thing that employees want more than anything, is some flexibility. And what you're both giving in different ways is a new flexibility for people to be able to shape and live their lives.

Vivek, your WeMa service is helping working carers to connect quickly and simply with healthcare providers in the community, removing the massive stress and distraction of accessing the services their loved ones need.

And Max, Wagestream, for example, might be helping someone in a situation where they’ve just had to fork out £50 or £60 on some stuff from Amazon that's going to help an elderly person coming out of hospital live their life a bit easier. When you're on £20,000 or less, you're a frontline worker, and you’ve budgeted every single penny, and you've got all the utilities going up, how can you afford this stuff that then comes on top? Being able to access the wages you’ve already earned can be a lifesaver in that kind of situation.

Max

I’d like to add to that too. We’re now finalizing an income protection insurance to cover people on zero-hours contracts for sick leave.

On a zero-hours contract if you don’t do any hours you don't get any money, right? So, there's a very innovative insurance company we're working with to underwrite it so that you can insure yourself very cheaply – it's hopefully going to be something like £2.00-3.00 a month to insure yourself for a set number of weeks’ pay if you get sick.

We’re still ironing out the details but could imagine a very similar product to insure against time off for care.

Vivek

I think the bottom line here is that there's no money from state to support working carers – and there's going to be limited funding for social care going forward.

So, it's going to come down to employers giving their people the support they need to deal with it in their own way. I wonder what incentives the government could give to businesses to stimulate business-backed support?

Therese

And I think the more we can get that into the mindset of the CEOs and the board – the people that are making decisions around the table – the better, because this has got to go faster up the agenda.

It shouldn't be this difficult for working carers!

********

If you’d like to find out more about any of the issues we were discussing, please contact me: therese@orgshakers.com.

The UK government were calling it ‘Freedom Day’ – the day when all Covid-19 restrictions would be lifted after two long years.

To be honest, even though Thursday 24^th February was also my birthday, it felt the furthest thing from a Freedom Day that I had ever experienced in my HR career. As one newspaper headline summed it up: ‘The sun is shining, but we’re keeping our umbrella’.

That morning I had taken a call from a HR director who was talking about the pressures her colleagues were facing. Change and uncertainty were causing stress-related absence to spike like never before and, for the first time, her Board had asked about employee financial poverty.

She wasn’t alone – it was the third call I’d had in a week where financial impact was the number one topic of concern.

For years financial poverty has been a ‘dirty little secret’ in many boardrooms – known about, but never really aired in public.

The CIPD recently published data in partnership with the Joseph Rowntree Foundation that 1 in 8 UK workers are in financial poverty. While research by financial wellbeing platform Wagestream has shown that 75% of the UK workforce have volatile and unpredictable pay, 50% run out of money before payday, 39% are not comfortable managing money, and 11.5 million have less that £100 in savings.

When financial issues are experienced, there is a direct link to mental and physical wellbeing with an impact on absence. If employees are worrying about money or covering up concerns this can also lead to a negative performance of up to 30% in productivity.

In short, the moral case and business case for acting on financial poverty is compelling.

What can I do to understand what’s going on for my Employees?

Over the past two-years’ the world has experienced a profound economic and social shock that has affected businesses and individuals alike. And the war in Ukraine is adding to heightened emotions of fear and distress as well as accelerating an increase in the cost of living – all of which are being highlighted in news, on social media and in every conversation, by the hour!

Now more than ever, it is critical to scrutinise whatever insights and data you have within your organisations thoroughly, to work out who is worst affected. Use the data determine how the trends are changing or have changed and get a plan of action in place to support your colleagues. Where data is light, or insights are not easily accessible, look internally and externally for support, advise and solutions.

Being aware of employee financial poverty it is no longer good enough. You need to demonstrate that you understand workplace poverty and engage in a conversation across the business about what is driving it and how it feels to be in financial difficulty. Only then can you start to put meaningful solutions and practices in place to help.

In my experience, the core to financial freedom begins with education on money health. It’s a topic that I was never taught at my school or in business. But increasingly it is coming onto the agenda of wellbeing, and rightly so. It’s never too late to start educating – and your employees will welcome your support.

Many HRDs and organisations are looking at external solutions to support their efforts on this topic. There are some really great technology-based solutions available which can help give employees ‘power over pay’.

I’m engaging more and more on this topic happy to share my knowledge and insights about the impact it has on wellbeing and inclusion as well as wider People Strategies.

It’s a conversation that is not going away, and it will require a dedicated focus if you are to retain your talent, maximise , workforce productivity, and demonstrate your understanding of what is , going on in everyone’s lives right now.

As I write this, I’m few days older, perhaps a little wiser, and the sun is streaming through my window. But I am acutely aware of the need for umbrella!