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FINANCIAL WELLBEINGIN THE WORKPLACE
AN OPPORTUNITY FOR FINANCIAL PROFESSIONALS
WWW.JASON-BUTLER.COM@jbthewealthman
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MY TOUGH START
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1. Workplace financial wellbeing defined
2. Why it matters
3. Money and mental health
4.The five levels of financial wellbeing
5. Working with employers
6. Resources to help you
FINANCIAL WELLBEING IN THE WORKPLACE
Q&A Please submit your questions throughout the session
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WHAT IS FINANCIAL WELLBEING ?
TRAINING
WELL-BEING
WORK LIFE BALANCEMENTAL HEALTH
AWARENESSPOSITIVE SUPPORT
PERSONAL RESILIENCE
EMPOWERMENTSAFE TALK
PRODUCTIVE
CONFIDENCE
ENJOYMENT
HAPPINESS
PEACE
STRESS AWARENESS
MINDFUL MANAGER
THE FOUR ELEMENTS OF FINANCIAL WELLBEING
PRESENT
FREEDOM
SECURITY
FUTURE
In control of day to day finances
Capacity to absorb financial shocks
Enjoying life Ability to meet financial goals
MONEY PRIORITIES
SECURE YOUR PRESENT IMPROVE YOUR FUTURE
Managing debt
Dealing with a crisis
Getting organised
Setting a new goal
Preparing for retirement
Managing debt
Dealing with a crisis
Getting organised
MONEY PRIORITIES
SECURE YOUR PRESENT IMPROVE YOUR FUTURE
Managing debt
Dealing with a crisis
Getting organised
Setting a new goal
Preparing for retirement
Setting a new goal
Preparing for retirement
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1. Workplace financial wellbeing defined
2. Why it matters
3. Money and mental health
4.The five levels of financial wellbeing
5. Working with employers
6. Resources to help you
FINANCIAL WELLBEING IN THE WORKPLACE
Q&A Please submit your questions throughout the session
11
PARKING TICKETS
UTILITYBILLSMOBILE PHONE
CONTRACT
Monthly Gym fees
CAR ROAD TAX
CHILDMAINTENANCE TV LICENCE
MOTCABLE TV
CONTRACTS
SCHOOLTRIPS
CAR/ HOUSEHOLD
BROADBANDCONTRACTS
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of employees are worried about money
36%
13 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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more likely to have sleepless nights
14.6x
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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hours lost per week on money worries
2.7
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
sick day a year for financial stress
1
16 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
8.5x
more likely to affect quality of work
17 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
12.4x
more likely to not be able to finish daily tasks
18 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
more likely to have troubled relationships with colleagues
7.7x
19 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
more likely to be looking for a new job
1.5x
20 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
Less productive
THOSE WITH MONEY WORRIES ARE
20-29
21 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
additional recruitment costs
THE CONSEQUENCE
22 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
additional training costs
THE CONSEQUENCE
23 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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THE IMPACT
9-13%of salary cost
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
ABSENTEEISM IS THE TIP OF THE ICEBERG
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Productive days lost annually20-29
Hours lost per week on money worries2.7
Sick days a year for financial stress
1.0
More likely to not be able to
finish daily tasks12.4x
1 day per year or 30 days a month per 1,000 employees
ABSENTEEISM
12 days per year or 360 days per 1,000 employees
QUALITY/FINISHING
TASKS
16 days per year or 470 per month per 1,000 employees
PRESENTEEISM
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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THE FINANCIAL WELLBEING OPPORTUNITY
UK employees across sectors are financially stressed, impacting their performance at work.
Absenteeism 1 incremental sick days each year
Presenteeism 11.7 hours/month worrying about money at work
Sleepless nights 14.6x more likely to have sleepless nights
Lower productivity 12.4x more likely not to finish daily tasks
Lower engagement 7.7x more likely to have troubled work relationships
Poorer quality work 8.5x more likely to have quality of work impacted
Lower retention 1.5x more likely to be looking for a new job
of UK
employees
report having
regular
financial
worries
36%
The 40% of UK employees with financial worries are prone to:
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THE COST OF POOR FINANCIAL WELLBEING:
Of people are worried about money
36%More likely to have
sleepless nights
14.6x
Hours lost per week on money worries
2.7
Sick days a year for financial stress
1.0
More likely to affect quality of work
8.5x
More likely to not be able to finish daily tasks
12.4x
More likely to have troubled relationships with colleagues
7.7xMore likely to be
looking for a new job
1.5x
Productive days lost annually
20-29
THE CONSEQUENCE
THE IMPACT
Additional training costs
Additional recruitment costs
Of salary cost
9-13%
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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MONEY WORRIES ARE NOT ALL ABOUT PAY
46%51%
40% 40% 37%30% 29% 29%
46%
<£10k £10-15k £15-20k £20-25k £25-30k £30-40k £40-60k £60-100k £100k+
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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1. Workplace financial wellbeing defined
2. Why it matters
3. Money and mental health
4.The five levels of financial wellbeing
5. Working with employers
6. Resources to help you
FINANCIAL WELLBEING IN THE WORKPLACE
Q&A Please submit your questions throughout the session
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FINANCIAL WELLBEING SIGNIFICANTLY IMPACTS MENTAL HEALTH
Financial worries vs No Financial worries
4.1xMore likely to be suffering from anxiety
4.6xMore likely to be suffering from depression
Those with financial worries are:
Anxiety / panic Depression
No financial worries
Financial worries
43%40%
+4.6x+4.1x
11%9%
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
MONEY IS THE LAST GREAT TABOO IN THE WORKPLACE
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Talk about Mental health52%
Talk about Money13%
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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“I have mental issues I have struggled with and struggle with still. It took me two decades to even open up and talk about it. I couldn’t have conceived about opening up in some of the firms I worked in.”
Paul Feeney, CEO Quilter PLCEvening Standard 18th January 2020
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34Source: Make their Money Count by Darren Laverty. Reproduced by kind permission
1. Poor financial wellbeing is negatively impacting organisations
2. Financial wellbeing canenhance existing HR initiatives
3. A financial wellbeing programmedoesn’t need to be expensive
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THREE KEY AREAS THAT THE BUSINESS CASE FOR FINANCIAL WELLBEING SHOULD COVER
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1. Workplace financial wellbeing defined
2. Why it matters
3. Money and mental health
4.The five levels of financial wellbeing
5. Working with employers
6. Resources to help you
FINANCIAL WELLBEING IN THE WORKPLACE
Q&A Please submit your questions throughout the session
THE FIVE LEVELS OF FINANCIAL FITNESS
1. StrugglersOften run out of money before pay day.
2. CopersHave virtually no savings and don’t have enough to spend on life’s little luxuries (e.g. a new pair of trainers, an evening out etc.) without feeling guilty.
3. BuildersHave some savings but don’t have sufficient resilience to deal with life’s unexpected expenses (e.g. a new boiler, vet bill etc.)
4. PlannersHave more than three months outgoings in savings. Can cope with an unexpected expense and have a plan in place to achieve long term financial goals.
5. ProsperersFinances are not a constraint to living the life they want.
37 Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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A TALE OF TWO WORLDS: COPERS & PLANNERS
5%
31%
17%
41%
6%9%
28%
16%
40%
8%
Strugglers Copers Builders Planners Prosperers
2018
2019
6%19%21%62%89%
% WORRED ABOUT FINANCES AT EACH SCORE
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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DIFFERENCE BETWEEN PLANNERS AND COPERS
PLANNERS COPERS
They save first, spend what’s left over They spend first, save what’s left over
Highly engaged with budgeting and planning, will pro-actively seek out new
information, like attending financial education sessions
Less engaged with budgeting and planning, will likely avoid anything to
do with finance, highly unlikely to attend financial education sessions
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“CONVENTIONAL” WISDOM
People who have financial worries are terrible with their money, and tend to be irresponsible
They don’t understand the importance of savings
They end up being frivolous in their spending and borrowing and get themselves into trouble
They don’t know how to budget
So that they would be as educated as I am, and make better decisions and be more like me
We need to give them financial education
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MYTH 1: THEY DON’T UNDERSTAND THE IMPORTANCE OF SAVING
88%82%
89% 86%
96%
0%
20%
40%
60%
80%
100%
120%
Strugglers Copers Builders Planners Prosperers
% Who understand the importance of savings
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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MYTH 2: THEY DON’T KNOW HOW TO BUDGET
Less than
5%of Copers and Strugglersdon’t know how to budget
It is not the setting of a budget that is the issue but sticking to it
5% 5% 1% 4%0%
Strugglers Copers Builders Planners Prosperers
I don’t have a budget becauseI don’t know how to create one
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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THE DIFFERENCE IS STICKING TO A BUDGET: A HABIT
32% 36%43%
49%
62%
0%
10%
20%
30%
40%
50%
60%
70%
Strugglers Copers Builders Planners Prosperers
% who stick to a formal budget or control their spending without a formal budget
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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PERSISTENT HABITS OVER TIME IS WHAT CREATES THE DIFFERENCES IN SAVINGS
Amount Saved a Month
Total Savings
£91Copers £818£249Planners £6,6512.7X 8.1X
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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HABITS
HABITS
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“People do not decide their futures, they decide their habits and their habits decide their futures.”
F.M. ALEXANDER
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“People do not decide their futures, they decide their habits and their habits decide their futures.”
F.M. ALEXANDER
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THE POWER OF TINY GAINS
1
1% better every day 1.01365 = 31.181% worse every day 0.99365 = 0.03
Improvement or Decline
1 Year
OUTCOMES
PROCESS
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IDENTITY
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THE WORLD OF COPERS AND PLANNERS IS VERY DIFFERENT WHEN IT COMES TO LOANS
34% 28%
8% 7%Of Copers of Copers
Of Planners Of Planners
% Refused a Loan % Missed a Payment
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
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COPERS & STRUGGLERS END UP PAYING ULTRA HIGH INTEREST
Borrowing options
Typical APR
Employee Situation
In Financial Difficulty
Strugglers
Usually Declined for
Credit
Vulnerable
Poor credit history
Copers
Payday Lenders
Avg Payday Loan1000% APR
Below Avgcredit history
Builders
Near Prime & Guarantor
Loans
Avg Payday Loan60% APR
Excellentcredit history
Prosperers
Banks
Avg Payday Loan19.9% APR
Goodcredit history
Planners
Credit Cards & Overdrafts
Avg Payday Loan22.6% APR
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ENHANCE EXISTING INITIATIVES
Expenses > Income
High Cost Debt
Interest ExpenseIncrease
Need to borrow
Limited No/ Savings
Poor Credit Score/ worsened with
Pay Day Loans/missed payments
Increase worryStress/ Depression
Worsening Financial Wellbeing
Unexpected Expense/ Drop in Income
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NORMAL LIFE EVENTS CAN CAUSE DROP IN INCOME…
53% 55%40%
26%20%
Strugglers
Copers
Builders
Planners
Prosperers
Did maternity/ paternity leave impact your ability to pay your
bills? 42% 46%
20%17%
11%
Strugglers
Copers
Builders
Planners
Prosperers
Did you take on additional debt as a result of your maternity
Source: The Employers’ Guide to Financial Wellbeing 2019-20 – Salary Finance
When people are in chronic crisis they need a quick solution to recover, and then help
to avert crisis the next time
Chronic smokers with failing lungs, get a lung transplant – then help with quitting
smoking (not the other way around)
53
Usually Declined for
Credit
54
SALARY-LINKED BORROWING IS A MUCH LOWER COST THAN ALTERNATIVES
Borrowing options
Typical APR
Employee Situation
Excellentcredit history
Goodcredit history
Below Avgcredit history
In Financial Difficulty
Poor credit history
Strugglers Copers Builders Planners Prosperers
Payday LendersNear Prime &
Guarantor Loans
Credit Cards & Overdrafts
Banks
Vulnerable Avg Payday Loan1000% APR
Avg Payday Loan60% APR
Avg Payday Loan22.6% APR
Avg Payday Loan19.9% APR
Typical APR Credit Builder 19.9% 12.9% 7.9% 3.9%
Income > Expenses
Increase Savings
InterestExpense
Decreases
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ENHANCE EXISTING INITIATIVESExpenses >
Income
Need to borrow
InterestExpenseIncreases
Boost in one’s financial confidence
and wellbeing
Improve Credit ScoreWith on-time, every
time repayments
Decrease in stress/ anxiety, ongoing financial worries and risk of depression
Increase in one’s finance resilience and ability to put money aside
Salary-LinkedLow Cost Loan
Consolidate/ Reduce Debt
High Cost Debt
SALARY-LINKED SOLUTION WITH FINANCIAL EDUCATION FOLLOW-UP
1. GET OUT OF DEBTSalary-linked loans are significantly can be used to consolidate high-cost debt, save on interest and improve credit score.
2. INTO SAVINGSSalary-linked savings gets people into saving first, spending later into savings habit.
3. AVOID HIGH COST DEBTSalary-linked advances help them avoid dipping into their overdrafts, resorting to payday loans or borrowing from friends/family.
4. BUILD BETTER HABITSFinancial education focussed on building better habits improves financial wellbeing over time.
Salary-linked financial wellbeing benefits make Copers look like Planners
57
FINANCIAL WELLBEING MEANS DIFFERENT THINGS TO DIFFERENT PEOPLE
• How do I make it to payday?
• How can I start saving?
• How can I buy a home?
• How do I maximise my pension and investment so that I can have a comfortable retirement?
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1. Workplace financial wellbeing defined
2. Why it matters
3. Money and mental health
4.The five levels of financial wellbeing
5. Working with employers
6. Resources to help you
FINANCIAL WELLBEING IN THE WORKPLACE
Q&A Please submit your questions throughout the session
Select the right financial wellbeing tools
Tutorials and webinars
Will writing Workplace savings
Wellbeing Survey
Cashflow forecasting
Payroll finance
ROBO Adviser
EB CommsOnline portal
EAP
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TWO PHASE APPROACH
Use a Financial Fitness Score
Enhance with an employee survey
12
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www.salaryfinance.com/uk/financial-fitness-score/
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CREATING A BUDGET FOR FINANCIAL WELLBEING
https://www.second-sight.com/blog/budget-for-financial-wellbeing/
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SF’S HOLISTIC FINANCIAL WELLBEING PLATFORM
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Helping employees to move from debt to savings and into financial health
• --- GROWING PRODUCT SUITE TO HELP EMPLOYEES MOVE UP THE FINANCIAL
WELLBEING CURVEPRODUCTS
Financial Education LIVE
Salary-linked savings LIVE
Salary-linked loans LIVE
Pay access / advance LIVE
HMRC Help-to-Save LIVE
Nest pensions sidecar LIVE
Protection insurance Q1 2020
Workplace mortgage Q1 2020
Money assistant App Q1 2020
+ new products in R&D
A FULLY DIGITAL JOURNEY
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4 The R-Factor Question®, Dan Sullivan and Strategic Coach. See http://blog.strategiccoach.com/dan-sullivans-r-factor-question/ and http://blog.strategiccoach.com/the-great-sales-conversation/ for more information
WHAT DOES SUCCESS LOOK LIKE?
68 @jbthewealthman
HOW TO COPE WITH A FINANCIAL EMERGENCYJason ButlerHead of Financial Education
YOUR CREDIT SCOREWHAT WHY & HOW
Making your hard earned money go further
Jason ButlerHead of Financial Education
71Source: Make their Money Count by Darren Laverty. Reproduced by kind permission
72
IMPRESSIVE
ENGAGING
MEMORABLE
Source: Make their Money Count by Darren Laverty. Reproduced by kind permission
FINANCIAL WELLBEING PRESENTATIONS
73
FINANCIAL WELLBEING TALKS
@jbthewealthman
MAX 55 MINS
STORY BASED – EMOTIONAL
TANGIBLE TIPS, TOOLS & TAKEAWAYS
INTERVIEW BASED Q & A OPTIONAL
CLEAR CALL TO ACTION
IN PERSON OR WEBINAR
CHARGE BETWEEN £300 - £1,500
@jbthewealthman
www.Jason-butler.com
An employer can pay for pension related advice or guidance up to £500 per annum per employee and it will not be taxed as a benefit in kind
The exemption applies to employees, former employees or prospective employees.
The exemption applies to the provision of information or advice in connection with the person’s pension arrangements or the use of the person’s pension funds. It can include advice on general financial and tax issues relating to pensions arrangements or pension funds allowing individuals to make informed decisions about saving for their retirement.
The exemption applies to the first £500 of advice in a tax year, so if the amount exceeds that figure the first £500 in that tax year is tax free.If an individual has more than one employment and each employer provides pension advice in the relevant tax year the exemption can apply to each employment.
https://www.gov.uk/government/publications/pensions-advice/pensions-advice
Basic rateMonthly subscription £40Effective cost £21.68
Higher rateMonthly subscription £40Effective cost £17.68
Additional rateMonthly subscription £40Effective cost £15.68
SALARY SACRIFIC LOWERS COST
83
1. Workplace financial wellbeing defined
2. Why it matters
3. Money and mental health
4.The five levels of financial wellbeing
5. Working with employers
6. Resources to help you
FINANCIAL WELLBEING IN THE WORKPLACE
Q&A Please submit your questions throughout the session
84
www.second-sight.com/resources/4411/
“The promotion of your programme requires perseverance but without becoming a pest. It is a fine balance between keeping it front of mind and making it stale. Try different things, inspect the results and refine accordingly. All workforces are different and you know your people.”
- Darren Laverty
GETTING THE MESSAGES ACROSS
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Emails
Video Testimonials
Manager briefings
Letters/ post cards home
Posters
‘My money’ story videos/ blogs from senior leaders
Live event/ video stream
Webinars
Repeat one or more of the above regularly
https://resources.salaryfinance.com/power-webinar-thank-you-for-attending
86Source: Make their Money Count by Darren Laverty. Reproduced by kind permission
SUPPORT EMPLOYEES AT ALL LEVELS OF FINANCIAL WELLBEING
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1. Workplace financial wellbeing defined
2. Why it matters
3. Money and mental health
4.The five levels of financial wellbeing
5. Working with employers
6. Resources to help you
FINANCIAL WELLBEING IN THE WORKPLACE
Q&A Please submit your questions throughout the session
PROGRESS, NOT PERFECTION
89
“You can’t tackle everything at once and talking to employees can help to identify what issues are important to them. My advice is to be brave and get started. If your intentions are well-meaning, then your results are likely to be positive. ”
ROSEMARY LEMON, GROUP HEAD OF REWARD, HAYS PLC
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