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.