Businesses need to do more to address employee financial wellbeing: Mercer 

Research shows that only half of UK employees have access to basic, accessible and collated financial information and educational content

London, 22 September 2022

The cost of living crisis has a firm grip on the nation. Inflation has risen from just 0.7% in January 2021 to over 10%¹ in August 2022; and with some forecasts suggesting it might peak at over 20%, many organisations’ workforces have already been significantly impacted.

The Bank of England is suggesting that inflation is unlikely to return to below 5% until the end of 2023, and the end of 2024 before it returns to more recent historic levels. It is very clear that businesses and their employees are increasingly in this economic squeeze together and for what looks like a long haul back to a more stable economic environment.

According to the global health, wealth and career consultants Mercer, the need for a renewed focus on businesses better supporting employee financial wellbeing has never been greater. 

“While recent steps from the UK Government to address the cost of living crisis are welcome, Mercer suggests organisations must do more to support employees with their financial wellbeing,” said Emma Roberts, Principal and Financial Consultant at Mercer.

Research from Mercer shows that less than 40% percent of organisations currently have a formal financial wellbeing programme in place², meaning many are missing out on a vital tool to support employees. With no end in sight to the current crisis and growing pressures for the Government and employers to do more, alternative options to double digit inflationary linked pay rises, which are likely to be unrealistic and risky, may seem bleak.

“Addressing employee financial wellbeing is not just about conducting remuneration reviews,” said Mrs Roberts. “The level of remuneration workers receive is obviously a significant factor for employees, but just addressing pay comes with risks and is likely to fuel a cycle of inflation rather than just ease current economic woes.”

Whilst there have already been a number of Government support measures and packages announced, notably with the new support measures to cap rising energy payments recently announced by the Prime Minister, it doesn’t change the fact that large parts of all workforces are already feeling the impact of soaring inflation and increasing energy bills. Naturally, this has led to people asking for help from their employers to meet these growing demands.

“When eighty five per cent of organisations still do not offer education around budgeting and debt, there is a huge opportunity to help employees with this fundamental skill, at a time when the need has never been greater,” added Mrs Roberts.

From households with modest incomes to those that are more financially resilient, the need for practical support to navigate these growing pressures has become more urgent.  And for increasingly large parts of the population, the reality is that the next 12 months will still present significant challenges and stress – both financial and mental as they try to cope.

Financial wellbeing is a fundamental business tool that organisations can use to help employees navigate these challenges together. Mercer has already seen a noticeable increase in demand from organisations to provide more regular and structured financial education for their workforce including content such as more regular webinars and videos. Providing financial education is one cornerstone to increase confidence and help employees take positive actions to improve their financial wellbeing.

“Sadly, Mercer’s 2022 Financial Wellbeing Index research report showed that only half of the organisations surveyed currently provide a financial wellbeing hub for their employees,” said Mrs Roberts.

“That potentially leaves millions of UK employees without access to basic, understandable and collated financial information and educational content.”

To support its clients, other organisations and individuals during this time of financial adversity, Mercer will shortly be launching a free-to-access Employee Financial Wellbeing Hub which any UK organisation can promote and use to support their employees or members during the continuing challenges of the cost of living crisis.

The Hub will be easy to navigate for employees, and provides useful information on all four key elements of an individual’s financial wellbeing. With the immediate financial challenges facing us all, there are many useful resources to help individuals to manage the day-to-day aspects of the current financial crisis, including:

• How to assess their current financial position and create or manage their budget better
• A handy weekly food planner
• What to do if they are finding it difficult to manage financially
• Mercer’s top tips for saving money
• Useful links to trusted external resources and Government cost of living support and information

Once launched and promoted, individuals are free to view and download the content – and are encouraged to share with their families and friends. 

Mrs Roberts added, “With the additional pressure of the cost of living crisis, there has never been a more critical time for organisations to actively support their employees’ financial wellbeing in any way they can – directly or indirectly.”

ENDS

¹  Source ONS February 2021 and August 2022

² Source Mercer Financial Wellbeing Index research report – May 2022

Notes to Editor

In line with the Consumer Financial Protection Bureau, Mercer defines the financial wellbeing of an individual as having both financial freedom and financial security both now and in the future. Mercer assesses financial wellbeing across four metrics: control over the day to day; preparing for the unexpected; freedom to make choices in life; and on track for the future.

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 83,000 colleagues and annual revenue of nearly $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.