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Why financial wellbeing is important in the workplace

Posted on July 4, 2023November 23, 2023 by Chris James

Improving employee wellbeing is one of the top priorities of HR leaders today. But what many people don’t realise is that 1.2 million households are currently suffering from financial stress. Therefore financial wellbeing is actually what sits at the centre of holistic wellness and has the potential to drive the most significant impact on working Australians. In this post, we’ll explain how to improve financial wellbeing in your workplace.

Financial wellbeing initiatives to bring into the workplace

Thankfully, there are many financial wellbeing initiatives that you can introduce to your employees. We share some of the most impactful ones below, along with an explanation of how they’ll improve the financial wellness levels of your workforce.

Novated car leasing

A novated lease allows employees to finance a new or used car by having their employer make payments out of their salary package with pre-tax deductions. With this arrangement, your employee is paying down a certain amount for a specified period of time. At the end of the lease period, they can choose to take out a new lease with a different car, extend the existing lease, or buy the car by paying the residual amount.

How this supports financial wellbeing:

One of the benefits of a novated lease is the tax break. Since the payments are coming out of your employee’s pre-tax income, your employee’s taxable income will be significantly reduced. Plus, your employees won’t have to worry about things like the goods and services tax (GST), which means they’ll have much more disposable income to use for their other needs.

Flexible pay

Flexible pay gives employees the ability to choose when they get paid – instead of following the organisation’s payroll schedule. For example, instead of receiving a paycheck every two weeks, an employee can choose to cash out on a weekly basis or even in real time. The whole purpose of this system is to allow employees to choose a compensation schedule that works for their specific needs and lifestyle.

How this supports financial wellbeing:

As you might imagine, flexible pay can ease a lot of financial anxiety for employees. Instead of worrying about whether they’ll receive a paycheck in time to pay rent or cover a credit card bill, flexible pay allows them to access the money whenever they need it.

Superannuation

Superannuation is money that’s set aside by your employer for your retirement – on top of your salary and wages. Employers are required by Australian law to make superannuation contributions for most of their employees and typically pay a minimum of 9.5% of ordinary time earnings.

How this supports financial wellbeing:

Superannuation is one of the best financial benefits for employees because it guarantees that they’ll have funds to use in retirement. Workers can also decide to make additional contributions to their own account or might be eligible to receive contributions from the Australian government, which can further increase the amount of retirement savings they accumulate.

Investment vehicles

There are many investment vehicle options that you can introduce to your employees – from managed funds to share schemes with your own company. Regardless of which ones you make available to your workforce, the most important part is educating them so they can decide which option is best for them. This can be done through training or financial literacy workshops.

How this supports financial wellbeing:

Helping employees find ways to invest and grow their money over time will help them in the long run – whether it’s when they retire or run into an emergency where they might need additional funds to dip into.

Lost super consolidation

It’s possible for employees to lose track of some of their super. This typically happens when they change their job or address. As an employer, you can provide the resources to help workers find their lost super, consolidate it with the rest of their contributions, and identify which account they want their future contributions to go to.

How this supports financial wellbeing:

Employees can save money by consolidating their super into one account. Having multiple accounts can accumulate fees, not to mention that having multiple sources of contributions can be difficult to manage.

Life insurance

The purpose of life insurance is to offer protection to employees and their loved ones in case of an unexpected life event. There are different life insurance products they can choose from that protect them from different types of events – whether that’s a death, a terminal illness diagnosis, or a bad accident.

How this supports financial wellbeing:

This is a wonderful initiative for employers to introduce because it gives workers peace of mind when it comes to unexpected life events. The last thing an employee wants to worry about after a car accident or diagnosis is to have to worry about finances, and life insurance is a great safeguard against that.

There are many effective initiatives that can increase your employees’ levels of financial wellness and – as a result – their overall wellbeing. Simply start with a few of the ideas that stood out to you in this post and go from there.

If you have any employees who are in need of support, be sure to check out Wellness@Work, a free hub designed to support HR and Australian workers by giving them access to free content.

If you’re looking for an additional HR software to support your business, Flare offers a free onboarding software with employee management and benefits. To learn more, please request a demo.

Determine your financial wellbeing score with these five questions

Posted on April 21, 2021August 9, 2023 by Cassiano Pessoa

A simple and easy way to start cultivating financial wellbeing is with a self-assessment to determine your financial wellbeing score. Not only is this a super way to review your finances, it’s also an opportunity to take stock of your financial situation and make positive changes (if needed). Given the current financial climate, now is the opportune time to undergo a financial health check. In the March 2023 quarter, all five Living Cost Indexes (LCIs) in Australia experienced rises, including Health, Housing, Food and non-alcoholic beverages, and Insurance and financial services. Medical and hospital services saw a 4.2% increase due to higher fees and private health insurance premiums. Electricity and gas prices rose by 14.3% due to higher wholesale prices, while food prices increased due to weather-related impacts and higher input costs. Put simply – it’s an expensive time to be alive, so let’s dive in and determine your financial wellbeing score.

What is financial wellbeing?

While there’s no strict definition, the term ‘financial wellbeing’ is often used to describe a state that includes being able to meet your financial obligations, having enough financial freedom to enjoy life, being in control of your money, and having solid financial security. ANZ defines strong financial wellbeing as ‘having enough money to meet your needs now and in the future.’

When looking for signs of financial wellbeing in your day-to-day life, it’s often a good thing if you can stay on top of your bills and debt, have enough money put aside for emergencies, and keep extra cash on hand so you can plan for important future expenses, like a house deposit or education expenses.

The state of financial wellbeing in Australia

While 60% of employees are content with their current compensation, “financial pressure” was found to be the most stressful factor in a survey of 1,500 Australian workers commissioned by Flare. It is not shocking, given the state of the economy right now. In particular, housing costs are cited by 77% of workers as a source of moderate to high stress¹. Now is as good a time as any to prioritise your financial health, as the rising cost of housing is unlikely to ease pressure anytime soon.

Knowing your level of financial wellbeing enables you to better understand your saving and spending behaviours, giving you a money snapshot that can be used to make adjustments.

What’s more, in addition to small tweaks to spending and saving, assessing where you’re at in terms of financial wellbeing on a regular basis can help you break bad money habits and assist you to reach your financial goals faster.

RELATED: Tax savings – how can your car help?

What questions should I ask?

When it comes to assessing where you sit in terms of financial wellbeing, one common method is to ask yourself a set of questions, and then give yourself a rating on each.

One of the most well regarded, and quickest to use, Aussie financial wellbeing surveys asks respondents to answer from 4 (completely) to 0 (not at all) on the following five questions. See how you go on the following:

Once you’ve determined your score for each, multiply the total by five, and this will give you your overall financial wellbeing score. A score of 0 to 22.5 means you’re “having trouble” on financial wellbeing, 25 to 47.5 means you’re “just coping”, 50 to 75 means you’re “getting by”, while 77.5 to 100 indicates you’re “going great”, and is the top category.

Thankfully, if you didn’t score as high as you’d like, or just want more financial peace of mind, financial wellbeing can move up or down depending on the decisions you make.

Whatever the result, you can feel positive that a financial self-assessment is the first step to better financial wellbeing and getting your personal finances headed in the right direction.

Information provided in this article is of a general nature only and we have not taken your personal financial objectives, situation or needs into account. We recommend you consider if you need to seek professional financial advice before making any financial decisions.

¹Flare National Employee Benefits Index, 2023.

Celebrating women leaders at Flare on International Women’s Day

Posted on March 8, 2021August 11, 2023 by Chris James

This International Women’s Day, the theme is #ChooseToChallenge. We are so fortunate to work with so many phenomenal women here at Flare, and we spoke with 4 of our female leaders about what this year’s theme means to them, and their best tips for living your best financial life and building inclusive workplaces.

Liz Crawford

Chief Technology Officer, Flare

Liz is an engineering, product, and data science leader with a background in artificial intelligence and entrepreneurship.

What does #ChooseToChallenge mean to you?

To me, the theme is about being a force for positive change. Identifying opportunities and taking action against them, speaking up. There are ways each and every one of us can make a difference. As someone in a technology leadership role I have the opportunity to mentor women, to build a diverse and inclusive team and to influence others to do the same.

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

There is so much that goes into this. I’m a big believer in hard work and honing your craft. This helps take care of your personal revenue line while you are younger via your ability to earn money for the work you do. For me, it’s not about maximising this revenue line, work is a large part of my life and it is important to me that I enjoy it and believe I’m contributing positively to the world.

The other side of this is savings, investment and spending. I have always spent less than I have earned which has allowed me to save and invest. Saving has required me to be frugal at times (I spent years doing a PhD on a fellowship), but it’s never meant not having necessities. I know that is a privilege. Everyone’s situation and preferences are different and at Flare we aim to help people in the ways that matter for them.

What advice do you have for businesses that are looking to build a more inclusive workplace?

Take the time to educate yourself. There is so much material out there you can learn from. Two specific tips on hiring. First, be aware of how your hiring criteria can skew your pool of eligible candidates. For example, if women engineers are less represented in a particular developer community, and you limit your search to that community you will likely end up with a worse gender ratio than companies with broader criteria. Second, if you want to hire a more diverse group, make a point of sourcing for it. Don’t just say, well we can’t do better because the candidate pool lacks diversity. If you care, make the effort. Same thing goes when organising a conference, recruiting a board, etc.

Brittany Wong

VP Marketing, Flare

Brittany is a marketing leader experienced in leading and building collaborative, high performance teams to drive market position, build demand and accelerate customer growth.

What does #ChooseToChallenge mean to you?

This is all about taking a stand for gender equality, and equality for all — and doing something about it. From what I’ve learned, gender inequality is at the heart of many injustices and socio-economic issues in communities and the world. Though many of us care about equality, few of us take action to drive change. “Choose to challenge” is a call to action to do something about it.

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

In my early twenties, I lived my best ‘party’ life, studied, traveled and worked crazy hours to start my career. But behind the scenes of all of this, I was always working to pay off my upcoming credit card bill. This trend went on for years, and I thought nothing of it. As I earned more, I spent more. It wasn’t until I was 25 when a girlfriend (that went out as much as I did), bought a house on her own without any financial assistance. I was floored. How did she do this? Weren’t we all spending our hard earned money frivolously? When I asked her how she did it, she told me that her mom, who raised her and her sister on her own, had taught them to put 20% of their earnings away every pay cheque since she started working at 16. My girlfriend followed her mom’s advice (which was mandatory at the start) and told me she never noticed the difference when it came to living life. This simple habit was the difference between me (who had absolutely no money to buy a house) and her (who was a homeowner at age 25).

I’ve learned that simple financial habits can go a long way. All you need to do is get started with one or two savings habits, then you can start investing and multiplying your wealth.

When I was young, technology didn’t exist to support or educate people on financial habits, but today, it does. Anyone can empower themself to live their best financial life with the right habits, education and tools; and that’s why I’m proud of what we’re building at Flare.

What advice do you have for businesses that are looking to build a more inclusive workplace?

Start somewhere. If you don’t believe building an inclusive workplace is important, then you can’t make progress towards it.

My advice is to start small and build up from there. Find a passionate group of people who care about inclusivity, identify a Project Sponsor (or senior executive) to support and raise awareness of the initiative, and drive progress through action and programs that can be felt and experienced by employees.

Janine Fry

Head of Customer Experience, Flare

Janine is a customer experience leader who has extensive experience in technology businesses.

What does #ChooseToChallenge mean to you?

For me it’s challenging the perception of women in the workplace, and more specifically in leadership. We should not need to mirror and mimic the behaviours which made our male counterparts successful. Successful leadership can be reflected in some of those non-traditional ‘success’ qualities such as kindness, empathy and tenacity; where you don’t need to have the loudest voice to be heard.

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

Before becoming a teacher, my Dad was an actuary and created a home where we were able to have difficult conversations about money, where the art of deciding between wants and needs were regularly practiced and where instant gratification was not common. Dad had a saying ‘people first, then money, then things’ (I later discovered it was ripped from Suze Orman)! For us, it meant – comprehensive insurance for my folks (life, income, health), good schools for my sister and I, followed by savings, then needs, then wants. It’s an approach I continue to practice, and an approach which overtime has enabled me to focus on long term financial wellness. The key takeaway here is acknowledging that finance is a deeply-emotional topic for many folks and having conversations early with kids is vital.

My sister and I were raised to be fiercely independent and wildly curious, which I’m forever grateful for, as it has shaped my view on learning. Educating myself on the things I don’t understand to enable informed, balanced financial decisions has been a game-changer for me.

What advice do you have for businesses that are looking to build a more inclusive workplace?

We all have our biases which have been developed and shaped by our experiences. For me, personally it’s acknowledging they exist and continuing to work to educate myself on that which I don’t understand. Assuming the best in everyone and giving myself time to deeply understand the experience of others.

Appreciate the fundamental reality of human nature. That we all like to be given an opportunity to be treated as individuals in an environment where our individual needs are considered and catered for. When that is done in a genuine and heartfelt way, diversity and inclusion organically starts to happen.

Emily Butler

Head of Consumer Marketing, Flare

Emily is a strategic marketing and brand leader with 18+ years of global experience in digital, entertainment, e-commerce and startups.

What does #ChooseToChallenge mean to you?

For me this is all about speaking up when something doesn’t seem right, and elevating women’s stories at a time when their voices are more important than ever. There are plenty of traditional values being dismantled and challenged every day in Australia and around the world, but there’s always more work to do. I started my marketing career in media 20 years ago, when gender bias and casual sexism was just another day in the office. I honestly didn’t even know it was a thing, the behaviour was so normalised. Seeing my female mentors challenge what it means to be a working woman and parent today has been a big inspiration to me, and I’m always learning and acknowledging that I have a responsibility to lift other women up.

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

Women in Australia retire with 40% less in superannuation than men, as we’re more likely to be out of the workforce to have children or provide care for family members. Combined with the gender pay gap, this can significantly impact women in retirement. Additionally, up to 16% of Australian women will experience financial abuse in their lives, which essentially renders women powerless in relationships as their access to money is restricted by their partner.

Developing a healthy, independent relationship with my money, and understanding how much I need to retire comfortably has been a big game changer for me. I had 5 superannuation accounts before I left Australia for New York back in 2011 — consolidating them via 5 different paper forms went very firmly into the too-hard basket as I packed up my life for the move. After I arrived in the city, I knew I had to get my act together and start adulting. I learned how to build my credit rating so I could rent an apartment. My now husband and I started saving — I am extremely fortunate to have a partner who shares every aspect of running our family 50/50. I opened a 401k retirement account as my employer made co-contributions — there is no compulsory superannuation system over there. I’m so grateful my boss at the time suggested I do this, as by the time I relocated back to Australia, my 401k was on par with what I had in those 5 superannuation accounts.

I’m really proud of our vision at Flare because we’re meeting Aussies where they’re at, and giving them the tools they need regardless of how far along they are in their financial journey. It’s never too late to start building healthy habits. And consolidating your super is extremely easy these days, especially if your super fund prioritises the digital member experience.

What advice do you have for businesses that are looking to build a more inclusive workplace?

It’s important to acknowledge our biases, unconscious or otherwise, and give underrepresented groups a voice. My advice to leaders and hiring managers is to check your privilege at the door, and don’t assume you know the challenges everyone faces on a daily basis. Speak to your teams. Understand how they feel, and be proactive in addressing any concerns they have. Having an open mind when it comes to hiring a woman who might be returning to the workforce is hugely important — I’ve seen how hard women have to work to feel in control of their careers. In New York, I went back to work when my first child was only 4 months old. I expressed milk for my baby in a bathroom, twice a day, for 6 months. This was very “normal,” and while going back was my choice, plenty of women do not have this luxury. They simply can’t afford not to work, or they’re concerned about the impact an extended break might have on their career.

Balancing work and family is hard — I really had no concept of this before I had children! I’m grateful to work at Flare alongside so many other parents, including our founders, Dan and James. They are both incredibly supportive and understanding when it comes to being a working mum and raising a family — and this should not be a rarity. Being human and empathising with each other is the key to a happy, inclusive workforce.

How HR can help employees with financial wellbeing outside of salary

Posted on October 7, 2020August 11, 2023 by Chris James

A lack of financial wellbeing is costing Australian businesses an estimated $31.1 billion in lost revenue every year. But more importantly, it’s negatively impacting the overall health of employees, who are having to take more sick days and struggling to be productive at work as a result of their financial stress.

What can HR teams do to support workers who are having trouble with their finances? Clearly, simply providing employees with a paycheck isn’t enough. In this post, we’ll explore additional ideas to help your workforce achieve better financial health.

How HR can support employee financial wellbeing

While paying employees a fair salary is an important part of financial wellbeing, there are other components to take into consideration. For instance, even if an employee makes a high salary, a lack of basic money management skills won’t set them up for success in the future.

That’s why HR needs to find other ways to advocate for the financial wellbeing of their employees – outside of their salary. We encourage HR leaders to work closely with their C-suite and finance teams to support initiatives that can set employees up for success – not only in the present – but also in the future. We share recommendations in the next section.

Ideas to help employees with financial wellbeing

There are many modern solutions to choose from when it comes to helping employees with their financial wellbeing. We share some of our favorite ideas below:

1. Encourage savings

Whether it’s to their superannuation account or a separate retirement account, it’s important to encourage your employees to put aside as much money as possible. There are a few ways to motivate employees to save. One of the most effective ways is to set up a system that allows workers to automatically take a portion of their paycheck and deposit it into their savings accounts. This way, your employees don’t have to make the challenging decision to manually take money out of their paycheck – it just goes into their savings without them noticing and will accumulate over time.

The benefits:

Sets employees up for success in the future
Allows employees to save for major milestones, such as purchasing a house or starting a family
Serves as a financial safety net in case of emergency

2. Provide flexible payment options

More and more employers are opting for flexible payment options for their employees. It’s easy to see why. Flexible pay is a great option for employees who want to access their paychecks on their own time instead of following the standard payroll schedule. So instead of receiving a paycheck every two weeks, an employee can choose to cash out what they earned in real time.

The benefits:

Allows employees to choose a compensation schedule that works for their needs
Relieves the stress of having to worry about whether they’ll receive a paycheck in time to pay rent or cover their next bill

3. Support major expenses

Many times, what prevents employees from experiencing better financial wellbeing is the major recurring expenses in their lives. For example, monthly car payments. Having to budget for the mortgage – on top of taxes, gas, and maintenance costs – for several years can be financially burdensome. To relieve the stress of this expense, your company can either offer company car loans or set up a novated lease that allows employees to finance a new or used car with payments out of their salary package with pre-tax deductions.

The benefits:

Makes major expenses more manageable and easier to budget for
Saves employees money in the long run
Doesn’t require a long-term commitment and offers more flexibility in terms of options

4. Create financial education opportunities

A lack of financial literacy is a huge blocker when it comes to employees achieving financial wellbeing. In fact, a survey found that fewer than half of all Australians could answer five basic financial questions correctly. To improve financial literacy, we recommend introducing various educational opportunities for your workforce. This can include anything from hosting financial literacy workshops to offering free sessions with financial advisors as a company benefit.

The benefits:

Empowers employees to take their finances into their own hands
Arms employees with the knowledge to make smart financial decisions

There are many things HR teams can do to improve the financial wellbeing of their workforce – even beyond just paying a salary. Identify which of these recommendations align with the needs of your organisation and get started on them today.

If you have any employees who are in need of support, be sure to check out Wellness@Work, a free hub designed to support HR and Australian workers by giving them access to free content.

If you’re looking for an additional HR software to support your business, Flare offers a free onboarding software with employee management and benefits. To learn more, please request a demo.

How to run a financial literacy workshop for employees

Posted on August 27, 2020August 11, 2023 by Chris James

We constantly hear about the importance of financial wellbeing. But how can we actually help our employees achieve this state? The answer lies in building up their financial literacy. While there are many ways to accomplish this, we believe that workshops are one of the most powerful approaches to financial education. In this post, we’ll share recommendations on how to run impactful financial literacy workshops for your employees.

What is financial literacy, and why is it so important?

Before we dive in, let’s explore exactly what financial literacy is and why it’s foundational to achieving financial health. Financial literacy is having the knowledge to make informed financial decisions. This can be anything from understanding how to invest at the right times to knowing how to save toward a significant milestone like a house or a car.

A lack of financial literacy is a significant problem in Australia. A survey found that fewer than half of all Australians could answer five basic financial questions correctly. The reason why this is significant is because low levels of financial literacy translates to poor financial health.

That same survey found that poverty rates among the least financially literate are twice as high compared to the most financially literate. People with lower financial literacy are also less likely to participate in household budget decisions, tend not to save as much money, and are more vulnerable to financial stress – a factor that costs Australian businesses an estimated $31.1 billion per year in lost revenue.

Related article: 5 Ways to help your employees improve their financial wellbeing

Steps to run a financial literacy workshop for employees

One of the best ways you, as the employer, can help combat these low rates of financial literacy is with education. Workshops, in particular, are a great way to get your employees engaged in their financial education. Not only are workshops interactive, but also having a large group of people at your organisation participate in them can make learning about finances less intimidating for others.

1. Identify your employees’ needs

Before you design your financial literacy workshop, it’s important to understand exactly what your employees want to gain from the experience. That’s why we recommend distributing a short survey ahead of time to figure out what your workforce most wants to learn from the workshop. This will help you design a curriculum that’s truly valuable.

For example: perhaps your workforce feels most urgently about learning how to save money – especially given the current circumstances with COVID-19. Instead, you host a workshop that’s solely focused on investing because you made an assumption about what would be interesting to the company. As a result, you disincentivise employees from joining future workshops since they’re not addressing their most pressing needs.

2. Craft a workshop series that addresses these needs

Once you have a clear understanding of what your employees want to gain from the workshop, it’s time to use that feedback to craft your workshop series. Outside of the content, there are other considerations to think about as well. Use the questions below to guide the design of your workshop:

How many workshops will there be in total?
How long will each workshop be?
What will be the cadence of these workshops (bi-weekly, monthly, etc.)?
How will we accommodate for employees in different time zones?

Make sure to answer these questions from the perspective of what’s best for your employees. So if you know many of your employees have young children, try to schedule shorter sessions that happen at a reasonable time of day. Or, better yet, have multiple session options so people can choose a time that’s best for their schedules.

Related article: 10 Ideas to help you boost your employee engagement

3. Choose a top-notch facilitator

It’s critical to choose an engaging, professional, and knowledgeable facilitator for your workshop sessions. Facilitators are trained to lead conversations about various financial subjects, but they’re not necessarily certified accountants or financial advisors.

There are a few criteria to take into consideration when choosing a facilitator. Choose an individual who has expertise in the specific topic you want to address – whether that’s budgeting or investment portfolios. Similarly, make sure they have experience facilitating in a virtual environment since most of us are still working remotely. The last thing you want is to hire someone who is uncomfortable on video calls and ends up leading an unproductive session.

4. Set expectations

It’s important to be clear with your employees about what they’ll gain from these workshops. You don’t want them to go into the experience thinking they’ll receive personalised financial advice from their facilitator. Instead, in all your communication about the workshop, let people know that the purpose of these workshops is to gain a basic understanding of important financial subjects. If they want additional resources to improve their sense of financial wellbeing, there are certainly ways you can support them! But these financial literacy workshops are solely for general education.

5. Build anticipation around the workshop

Now that you have the financial literacy workshops scheduled and in place, how do you get your employees to actually join? In addition to announcing the workshop at your next all-hands meeting, there are other creative tactics you can implement to build anticipation around the workshop:

Set up catchy Slack reminders about the upcoming workshop
Incentivise participation by offering a random prize drawing for those who join
Ask the CEO to join and encourage participation
Communicate the benefits that come with increasing financial literacy
Take photos (or screenshots) and create a “teaser” video after the first workshop to encourage more people to join for the next one

6. Follow up with a survey

Finally, just as we started the financial literacy workshop with a survey, we want to end with one too. After the first session, ask your employees how they felt about the experience. Specifically, did they gain value from it? If not, what could have been improved? Also ask questions about the facilitator to make sure they’re the right fit for your workforce. You can then use all the feedback you collect to make adjustments before your next workshop.

Workshops are a fantastic way to help your employees with their financial literacy and, in turn, improve their sense of financial wellbeing. Use the steps we outlined above to run a financial literacy workshop that will be impactful for both your workers and your business.

If you have any employees who are in need of support, be sure to check out Wellness@Work, a free hub designed to support HR and Australian workers by giving them access to free content.

If you’re looking for an additional HR software to support your business, Flare offers a free onboarding software with employee management and benefits. To learn more, please request a demo.

What is a novated lease and how does it work? Here’s everything you need to know

Posted on August 19, 2020August 9, 2023 by Chris James

We’re always trying to think of the best benefits to offer our employees. Ones that will either relieve or solve a pain point they’re facing and generally make their lives easier. A benefit that you may not have considered yet, but checks both of these boxes, is a novated lease.

If you’re unfamiliar with this concept, don’t worry! In this post, we’ll explain exactly what a novated lease is, what the benefits are, and what this financial offering looks like in action.

What is a novated lease?

In the simplest terms: a novated lease allows employees to finance a new or used car by having their employer make payments out of their salary package with pre-tax deductions. These payments include the cost of running expenses as well, such as maintenance, insurance, and petrol.

In other words, it’s a deal between an employee, a finance provider, and an employer to lease a vehicle. The key word here is lease. As you might be aware, this is a bit different from renting or owning a car. With a lease, your employee is paying down a certain amount for a specified period of time (usually anywhere from one to five years). At the end of the lease period, they can choose to take out a new lease with a different car, extend the existing lease, or buy the car by paying the residual amount.

You may be wondering: why should I offer my employees a novated lease when they can just finance their own cars? This is a great question. As you’ll see in the next section, a novated lease comes with many benefits.

The benefits of a novated lease

There are many upsides that come with offering a novated lease – for both the company and your employees. Let’s dive into some of the top benefits below:

For employees

Tax savings. Of course, the biggest advantage to a novated lease is the tax break! Since the novated lease payments are coming out of your employee’s pre-tax income, that means your employee’s taxable income will be significantly reduced. Your employees also don’t have to pay the goods and services tax (GST) that they would normally have to if they were buying a car themselves. As a result, they’ll have much more disposable income to spend in other areas of their life.

Less logistics. Another benefit of the novated lease over other methods of financing a car is the reduction in logistics. Instead of having to manage multiple payments – from monthly loans to car maintenance expenses – everything is simplified into a single monthly deduction from your employee’s paycheck. And since the process is largely managed by the employer and the finance provider, your employee doesn’t have to stress about budgeting or scheduling payments.

Flexibility. A novated lease also gives your employees more flexibility. At the end of their lease, employees can choose to upgrade to a different type of vehicle, brand, or style since they don’t own the car. For example, if their family grows, they can opt to start a new lease for a larger car to accommodate their needs. Similarly, if the employee ends up loving the car they leased, they can also choose to buy that car by paying off the remaining cost.

For employers

More talent. Offering a novated lease is a great way to stand out from the competition when it comes to attracting new talent. It’s a fantastic benefit that will help employees save money and demonstrates that your organisation cares about their financial wellbeing. The best part? It costs you very little to do so – especially compared to alternative options like managing a company fleet.

Low risk. Another great benefit is that there’s very little risk to your business with a novated lease. Vehicles under this agreement aren’t considered an asset or liability to your company. Plus, the vehicle doesn’t become your responsibility if your employee decides to leave before the end of the lease.

How does a novated lease work?

Now that you have a clearer understanding of the novated lease, let’s talk about what it looks like in action. At Flare, we offer a novated lease option that employers can register their workforce for. Once you’re signed up, the steps to get your employees set up with a novated lease are fairly straightforward:

Check eligibility. If your employee wants to take advantage of the company’s novated lease benefit, you just have to make sure they’re eligible! Eligibility requirements tend to differ depending on the organisation. For instance, some employers don’t extend the benefit to casual workers since their pay tends to fluctuate. Once you’ve determined that your employee qualifies, give them the thumbs up to pick a car!

Enter into a lease agreement. As we mentioned before, this will be a three-way agreement between you, your employee, and a finance provider. At this step, you’ll decide things like how much of the employee’s pre-tax salary will be taken out for the repayments under the novated lease, how long the lease is for, etc. There’s also some paperwork that will need to be completed, such as the finance lease agreement and the novation agreement.

Make repayments on behalf of your employee. Once all the details of the lease are settled, all you have to do is make sure to set up the deductions from your employee’s pre-tax salary and make repayments directly to the finance provider. Aside from that, the car is largely your employee’s responsibility. They will come to you if they have additional questions or concerns.

As you can see, the novated lease is a great benefit to consider adding to your employee offerings. Not only does it give your workforce a flexible financing option for a car, but it also provides them with many additional benefits like tax savings and reduced stress around the logistics of owning a car. If you’re curious to learn more, check out Flare Cars for more information.

What to do when you can’t give your employees a pay rise

Posted on July 28, 2020August 9, 2023 by Chris James

With Australia now experiencing a new wave of COVID-19 outbreaks, companies continue to feel the pressure of the pandemic. Unfortunately, this also means that employees may have to keep waiting for their promotions and pay rises due to constrained resources. This, of course, is likely to lead to lower employee morale.

But there are ways for companies to mitigate the negative impact of the pandemic. One of the best solutions is to consider expanding your benefits offerings. These additional offerings can support your employees in key areas during this challenging time and also provide some financial relief to make up for the lack of a pay rise. Below, we share four categories of benefits to consider:

Flexible work benefits

According to a study, a flexible work arrangement is one of the ‘must have’ benefits for Australian employees. This is especially prevalent now, as employees are feeling the stress of balancing their work and home lives once again. Here are some flexible work benefits to consider:

Flexible working hours. The 9 to 5 schedule doesn’t work for all employees – especially those with families and children. Allow your workforce to choose their own hours so they don’t have to stress about being online at a time that’s inconvenient for them. This will not only relieve stress but also demonstrate to employees that you understand and respect their individual needs.

Work from home options. Whether your employees have recently returned to the office or are still remote, it may be a good time to either extend or offer up work from home options as an alternative to being in the office. As COVID-19 cases escalate again, you want to make sure everyone feels safe while they work.

Home office setups. If you do have employees working from home, relieve some of the burden by paying for their home office set up. This can include covering the cost of a new desk, chair, monitor, or whatever else they need to work comfortably from home.

Financial benefits

Even if you can’t directly provide a pay rise, there are other ways to financially support your employees – while staying within your HR budget. Below are a few ideas of the types of financial benefits you can offer:

Employee discounts. At Flare, we have an exclusive benefits and discount platform. that provides your employees with discounts from hundreds of leading retailers, including Amazon, Woolworths, and Foot Locker. Giving your workforce access to these types of benefits can ease some of the financial burden they’re feeling right now.

Novated car leasing. Offering employee benefits like novated car leases and salary packaging can help your employees reduce their taxable income and therefore reduce their income tax. Flare offers novated car leasing to customers as part of employee benefits.

Real time pay. Imagine if employees could access their pay after each day’s work rather than waiting for the weekly, fortnightly or monthly pay cycle? This could soon be a possibility. Flare will soon be offering real time pay as part of employee benefits so that employees can access their pay for a small fixed fee for when they really need it.

Equity. If you can’t afford to increase the salary of your employees, consider giving them more equity instead. This is an investment that can pay off many times over in the long run, and it gives workers more stake in your organisation – which, in turn, can boost morale and engagement.

International payment transfers. You may have employees with family members outside of Australia that they’re providing financial support to during COVID-19. If you want to help them save on expensive transfers, consider offering WorldRemit as a benefit – they offer much more affordable international money transfers. They’re also a partner on our own benefits platform!

Physical and mental health benefits

Your employees are dealing with many stressors right now – from feeling anxiety around their job security to worrying about the health and safety of their family members – which can come with negative physical and mental health side effects. To help them combat these potential problems, you may want to consider the following benefits:

Wellness budget. If you have the funds to do so, consider giving each employee a wellness budget. They can use this money to invest in self care. For example, they can use this budget to cover the cost of a massage, new running shoes, or an online meditation course – anything that helps improve and maintain their sense of well being.

Fitness subsidisation. Staying active can go a long way. And the great news is that there are tons of virtual fitness classes these days. So whether it’s an online yoga course or a cycling class, pay for your employees to indulge in their favorite exercise routines – it gives them one less thing to worry about cost wise and encourages them to get moving.

Healthy snack delivery service. If you want to make healthy eating more accessible for your employees and boost their morale, provide them with delicious snacking options! Companies like Snacks With Bite will deliver healthy snacks directly to your employees’ homes. It’s one less decision they have to make, and it’s something they can share with the rest of their family.

Family benefits

As schools start to close down again due to the new wave of outbreaks, parents are scrambling to figure out how to balance work and family life for the second time. Not receiving the pay rise they were expecting can further exacerbate your employees’ stress levels. To help, here are a few benefits you can offer:

Childcare support. If your working parents do find themselves back at home with the kids, give them the funds to hire additional childcare support. Maybe they can have a trusted babysitter take care of the kids in the morning, when they’re the busiest with work. Or they can hire an in-home chef to prepare healthy meals for the family if they don’t have time to.

Fun family activities. It’s challenging for parents to always think of new, stimulating things to do with their children. To help, send your working parents “family care packages” that contain fun activities – such as puzzles, at-home scavenger hunts, or s’mores kits. This is one less thing that your employees have to think about and gives them a reason to spend quality time with their families.

Even though your employees will be disappointed to not receive the pay rise they’ve been waiting for, they’ll appreciate your efforts to compensate them in other ways in the meantime. Take care of your employees’ needs during this challenging time, and you’re likely to see a more engaged and productive workforce.

Want to give your team access to more employee benefits and discounts? Flare Employee Benefits gives your workforce access to an exclusive benefits and discount platform of leading retailers like Woolworths, JB Hi-Fi and Amazon. If you’re looking to implement more employees benefits in your company, reach out to [email protected] to learn more.

Understanding the finances of your international workforce

Posted on July 27, 2020September 7, 2023 by Chris James

For Australian employers there are many considerations to be taken into account when employing people from overseas. One that may not be so obvious is understanding the financial circumstances of these employees with international backgrounds.

For example, did you know that many international employees may have loved ones living overseas with a financial responsibility to regularly send a proportion of their earnings back home? This financial assistance, known as ‘remittances’ supports their loved ones with daily living expenses like paying for rent, utilities, groceries, health and education.

This following article outlines some of these considerations and the role you can play as an employer to support your employees.

Global Remittances

Remittances are an essential source of income for millions of families around the world and remitters play a key role in the social and economic development of their countries.

In 2019, global remittances reached a record US$554 billion and they are instrumental in many countries. For example, personal remittances received in Nepal made up over a quarter of the country’s GDP in 2019. In the Philippines, it is a well-established cultural practice to head overseas to work. In fact, 2.2 million, at any time, of these overseas Filipino workers are engaged in industries as diverse as healthcare to seafaring. From Australia, both India and China are also substantial recipients of remittances. Many remitters will see their remittance as a non-negotiable financial commitment, in the same vein as Australians might regard their mortgage payment. Behaviour varies, but many remitters will send money home as many as four times a month.

Financial Access

Like all employees, migrants working in Australia require an Australian bank account to receive their salary. Fortunately, unlike other countries, it is very easy to set up, with the ability to apply for one online regardless of location, with many free or low-cost options.

However, for recent arrivals to Australia, applying for credit cards is not as simple. Banks will usually require some credit history here in Australia before granting even a small credit limit. This can place a credit card off limits for new arrivals, which can be a source of frustration for migrants who have enjoyed well established financial affairs in their original home country.

Tax and Super

The rules relating to taxation and superannuation are complex, and vary according to the individual circumstances of your employees.

In general, many people from overseas who have worked and earned super while visiting Australia on a temporary visa, can apply to have their super paid to them as a departing Australia superannuation payment (DASP) after they leave.

On tax, as long as foreign residents have earned more than $1 in Australia during the financial year they can choose to lodge a tax return. This lodgement can even be done online in your employees’ home countries after they depart. If your employees are leaving Australia permanently, they may be eligible to lodge an Australian tax return early. In this instance the process is offline and is known to take longer.

The monies received from a superannuation payment or a tax refund, regardless of amount, is highly valued as an extra boost of financial support for when your international employees are returning to their home country.

What can you do as an employer

Understanding the unique financial considerations of your international and migrant workforce is a great first step, but there are also a few practical ways you can help:

Sending money home: For remitters, maximising the amount their friends and family receive whilst ensuring the security of the transfers is paramount. Due to lack of awareness, many new arrivals will default to using their bank to transfer money home. However, the Australian Government (in the ACCC’s 2019 report) expressly highlighted that using digital non-bank alternatives, such as WorldRemit, can be a cheaper and faster way to send money home. Also, for employees who are working in remote locations, the fact that these services are fully digital means they can be accessed from a smartphone at any time (without having to visit a bank branch or agent location). Helping make your employees aware of these alternatives, can ensure their families and friends are receiving the greatest amount possible by way of remittances without delay.

Financial access: As employees establish themselves in Australia, you may find they come to you more frequently than others for proof of income or employment, as they navigate the likes of housing and credit applications. Bear in mind your company expenses policy, where they require employees to front large expenses before being reimbursed, may be unduly burdensome (or not possible) for new arrivals who don’t have a credit card.

Tax and Super: Each individual is different so the best thing you can do is direct your employees to the ATO website, which has extensive resources relating to international tax and access to superannuation. The ATO guidance suggests that employees check with their employer before they depart to make sure that all super contributions have been paid – so don’t be surprised if you receive these sorts of queries from your team.

WorldRemit is currently offering the first three transfers free to all Flare users. You can access WorldRemit through the Flare employee benefits portal.

Why providing financial literacy for employees is important

Posted on July 13, 2020August 11, 2023 by Chris James

Everyone is familiar with the concept of literacy, which refers to one’s ability to read and write. It’s a skill that clearly has a huge impact on everyday life. But what people might be less familiar with is the idea of financial literacy, which is having the knowledge to make informed decisions about one’s financial situation – from budgeting to investing to saving.

Unfortunately, Australians have long struggled with financial literacy. A study found that only 50% of men and 35% of women were able to answer five basic financial questions correctly. The good news: there’s an opportunity for employers to step up and help improve the financial literacy of their employees. We explore how in this blog post.

The importance of financial literacy

Before we dive in, it’s important to establish why financial literacy is such a critical skill to invest in. The short answer is that financial literacy leads to better financial health. And there’s a lot of research to support the fact that poor financial health creates many problems for employees – from health problems to anxiety, which eventually leads in lost revenue for companies.

Let’s take a closer look at some of the statistics:

Two in five Australian workers experience financial stress during their careers
As a result, these employees take an extra 2.4 sick days per year
1 in 5 employees also admit to being less productive at work because of financial stress
This costs Australian businesses an estimated $31.1 billion per year in lost revenue

Looking at these numbers, it’s clear that improving the financial literacy of employees should be a top priority for organisations.

Barriers to financial literacy in Australia

So what exactly is it that’s preventing people from being financially literate? We can generally attribute low financial literacy to a lack of access in three categories:

1. Education. By far the biggest barrier to financial literacy is a lack of access to financial education. To have the confidence to make smart financial decisions, one first has to be equipped with the knowledge to do so. Unfortunately, financial topics aren’t built into our education system, which means that many people reach adulthood without an understanding of how to manage their money or save for long-term milestones.

2. Tools. To improve financial literacy, it’s not enough to simply memorise information. That knowledge needs to be put into action. But employees may find themselves feeling overwhelmed or require some assistance to get started. That’s where access to financial tools – which can serve as the bridge that helps people go from having knowledge to taking action – may be useful.

3. Professional support. Finally, it’s important to recognise that financial topics are inherently complex – which is a large part of what makes financial literacy so difficult to achieve. This means that almost everyone could benefit from receiving professional support to help answer questions and guide their decisions.

In the next section, we’ll share a few recommendations to help lower the barriers to entry when it comes to these three categories.

How to help your employees build financial literacy

When it comes to your own employees, there are many ways you can improve their financial literacy. This will, in turn, help their sense of financial wellbeing and lead to decreased stress, boosted productivity, and less revenue lost for your organisation.

Related article: 5 Ways to help your employees improve their financial wellbeing

Education

To increase access to education, consider offering financial wellness benefits that provide employees with the space to learn more about relevant topics. This can come in the form of online courses, in-person trainings, or even printed materials that your HR team puts together. The most important part is to make sure these educational resources are accessible to your entire employee population. Here’s how:

Raise awareness. If employees aren’t aware that these educational resources exist, then they won’t use them. Throughout the year, send out reminders to employees – whether it’s through email, Slack, or in-person announcements – that make them aware these benefits are available to them.

Offer various formats. Not everyone enjoys learning through an online course. Similarly, some people don’t enjoy reading through printed materials. So where possible, try to offer a variety of educational formats to match the specific needs of your employees. Better yet, consider using a survey to make data-driven decisions.

Tools

As we mentioned before, tools are a great way to encourage employees to take action on the financial knowledge they acquire. There are many types of financial tools you can offer your employees, such as real-time payments or budgeting apps to make money management easier. The tricky part, of course, is getting employees to actually use the tools you offer. Here are a few tips to improve adoption:

Create incentives. Consider building in incentives for employees to use the financial tools that are available to them. For example, perhaps you can “gamify” the budgeting app so that every time an employee uses it, they collect points and can eventually win a prize of their choosing. Or you can incentivise more superannuation contributions by “matching” however much they add to their accounts, up to a certain amount.

Make it social. Believe it or not, there are ways to make finances fun for your employees. One way is to make using financial tools a social experience. Create a financial health support group, which employees can voluntarily join to talk about their favorite tools or their personal finance goals. Or, with permission, share employee testimonials on the intranet or at the next all-hands meeting about how much they’ve benefited from using the financial tools provided to them. This may inspire others to adopt those same tools!

Professional support

You can also offer professional services, such as financial advising or counseling, as part of your financial wellness benefits. You, as an HR leader, can also offer up your expertise on topics like salaries and retirement savings. Having access to an expert who can answer questions or explain tricky concepts is an effective way to improve an employee’s financial literacy. Of course, talking about money to you or a professional may feel uncomfortable for employees. To help, we have some recommendations:

Normalise the conversation. Make finances a normal conversation to have in the workplace. To encourage this mindset: train your managers to openly answer questions about salaries; Host lunch and learn about financial topics; And encourage support groups where employees can discuss finances in a safe space.

Have company leaders set an example. One of the best ways to encourage employees to have more conversations about finances is to have your company leaders set an example. For instance, have your CEO share that he or she also uses the company’s financial counseling resource. Seeing someone in a leadership position get help with their own financial situation may inspire others to do the same.

Financial literacy is so critical in determining the overall success, wellbeing, and productivity of your employees. As an organisation, you have the opportunity to unlock financial resources that they might not have access to otherwise. Start with one or two of our recommendations to help improve your employees’ financial wellbeing.

If you have any employees who are in need of support, be sure to check out Wellness@Work, a free hub designed to support HR and Australian workers by giving them access to free content.

Related article: 10 Ideas to help you boost your employee engagement

If you’re looking for an additional HR software to support your business, Flare offers a free onboarding software with employee management and benefits. To learn more, please request a demo.