Insights

How employers can protect their workers from financial scarcity

Financial wellbeing benefits are playing an increasingly important role in supporting employees with all aspects of budgeting, saving, and education, but they can equally support in flipping the scarcity mindset. Here is an action-plan for employers on how your financial wellbeing benefits can reframe the scarcity mindset into one of abundance. Initiative Action Pay Pay is foundational to employee wellbeing - and will always be the most-valued workplace benefit. Where possible, regular/reliable increases to pay can provide greater budgeting flexibility and boost motivation. Tracking & visibility Tools to help provide shift-tracking and visibility over pay can be effective for managing a scarcity mindset. They can help drive positive decisions around budgeting, and motivate towards taking up extra shifts. Flexible Pay Flexible access to pay is an effective benefit to support employees in mitigating a scarcity mindset. Bills and expenses are not regular in timing or amount - being able to manage these expenses as and when required helps alleviate fears of financial scarcity. Savings Savings are paramount to financial wellbeing, but regular saving can be difficult for those on low-incomes. Accessible or automated savings options, including opt-out options, can make building a buffer manageable and support long-term financial health. Budgeting There are several benefits that can support employees with their budgets. Offering vouchers, discounts, insurance, or access to a rewards platform can all help to create space in a tight budget. State support Many workers are not aware that they may be entitled to government support, or may not know how to find out. There are many providers that offer simple calculators to access this information - which could provide workers with valuable extra income. Communications Providing a holistic set of financial benefits is the first step in supporting employee wellbeing - the next step is communicating them. Take advantage of all internal channels, utilise awareness days, and nominate champions to encourage uptake. ","post_tag":"Action-plan

How workers are being held back by feelings of financial scarcity

But how can a scarcity mindset, particularly one based around money worries, hold employees back from giving their best performance in the workplace? Here are some of the ways in which this manifests itself in the work environment. Absenteeism An increasing amount of external research confirms a correlation between absenteeism and financial stress. In a recent piece of research into how Wagestream’s members use flexible pay to support their budgeting and manage their finances, we discovered that 22.1% of people use it to cover the cost of their commutes. This finding highlights a universal expense that is often overlooked. Internal policies and benefits are usually built to support colleagues in the workplace - whether that's equipment allowances, food and drink, or discounted merchandise; however, do those policies support your colleagues to reach the workplace in the first place? The difficulties and expense that the work commute presents may not be immediately apparent to those who work a 9-5 office job, where transport options are far more varied and available; however, deskless workers are often working unusual shift patterns, evening and night shifts, and public holidays - and can be left short of choice. Take a nurse who is working the night shift at a hospital, finishing in the early hours, which potentially leaves a taxi home as their only transport option - this is where the cost of commuting becomes a burden, and absenteeism becomes a viable option to tackle fears of financial scarcity.","post_tag":"Research

Scarcity mindset and the impact on workforces

Inclusive Leaders: Caravan's People & Culture Director

Could you tell us about your background? What was the journey to your current position? I'm a high-energy People and Culture leader with over 15 years of experience in a people function and nearly 20 years in the hospitality industry. I moved from Brazil to the UK in 2004 to pursue a degree in Social Communications, which ignited my passion for People and HR. My areas of expertise include team engagement, recruitment, training/learning and talent development. Currently I hold the role of People and Culture Director at Caravan Restaurants and Coffee Roasters and prior to Caravan, I worked at Megan’s, Wahaca and Wagamama for several years. This shaped my 'People Magic' strategy through company expansion and team growth - driving culture and talent development and being instrumental for dozens of new site openings, focusing on culture and nurturing talent. Tell us more about your role as People & Culture Director at Caravan. What projects are you currently working on? What are you most excited about? In my current role at Caravan I implement the business's strategic vision, promoting an inclusive culture, and recruiting and developing top-quality, diverse talent. My people strategies, which I define as “People Magic”, are finely tuned to align with business goals, taking advantage of people analytics and a hands-on approach to ensure more adaptability and measured actions in the changing landscape of the hospitality industry and the world. Currently our 80:20 strategy is a core priority, where we aim to develop 80% or more of our internal teams into management roles, using our newly updated career pathways. ","post_tag":"Strategy

Financial and mental wellbeing: an employer's guide | Wagestream

Stress and anxiety are major contributors to poor mental health. Since 2011 stress has been the leading cause of long-term sickness absence, while in 2018, it was officially declared by the Health & Safety Executive as causing more depression/anxiety in the workplace than musculoskeletal conditions. The impact of stress on mental wellbeing is so severe that a recently introduced ISO standard (ISO 45003) urged employers to tackle the so-called ‘psychosocial’ risks of the workplace [such as poor job design causing overworking/burn-out].But what workplace academics are now increasingly realising is the very great link between financial wellbeing and stress, and therefore the impact poor financial wellbeing has on overall mental wellbeing.There are several indicators that experts say are substantiating this finding. 1. Financial anxiety equates to poor mental wellbeing In recent years, behavioural scientists have unequivocally linked instances of financial anxiety with having a damaging contribution to people’s overall mental wellbeing – the impacts of which can last for several years. A US study in 2019 found more than half of Americans lose sleep at night due to having financial worries. Unexpected expenses, in particular, have been found to cause stress levels that reach dangerous levels. In fact researchers at the University of Georgia have found that suffering serious financial penury, combined with it causing stress at the time, can result in physical health problems many decades later. Simplistically, when people suffer stress, their ‘flight or flight’ parasympathetic nervous system is always ‘on’. This means they are triggering a cascade of stress hormones that cause real physiological changes. Unfortunately, the body can overreact to stressors, creating long-term effects on physical and psychological health. 2. Those in worse financial situations report worse mental health Back in 2017 Willis Towers Watson revealed only 43% of staff were satisfied with their financial situation, and since the pandemic (which has seen millions furloughed and many others on reduced salaries), the numbers worrying about money have spiralled.In recent research released to coincide with World Mental Health Day, it was revealed 9.5 million adults claim to have suffered from mental health issues as a result of financial anxiety. Half of these people worry about the day-to-day issue of making ends meet. 9.5 million adults claim to have suffered from mental health issues as a result of financial anxiety Those still unconvinced about the link between pay and mental health should be left in no doubt by data from statistics from a recent ‘Thriving at Work’ report [PDF], which was categorical in its findings: amongst staff that describe themselves as “financially comfortable,” 41% report signs of poor mental health. But this figure rises to 51% for those describing themselves as “just about managing,” and 67% for those in “financial difficulty.” 3. Poor financial wellbeing links to poor financial decision-making When people have limited resources it’s scientifically proven that they adopt a ‘scarcity mindset’ – whereby all attention is directed solely on how to get through the week/month.This means people with poor financial wellbeing have a harder time making decisions that involve long-term thinking, which is key to financial planning and thriving.What this means is: poor financial wellbeing can be self-sustaining if employees don’t have access to the right tools and this situation can contribute to poor mental wellbeing over time and long-term stress.

Quick tips on helping first-time savers

Given that we are collectively facing one of the largest financial shocks of the last century, with 78% of UK employees worrying most about having no savings or encountering unexpected costs, it is crucial that employees are encouraged to protect themselves.Employers can play a critical role in supporting their employees with saving, and one of the most impactful ways to do this is by launching a savings campaign within your organisation.Here are four key principles to guide your campaign. 1. Know your people Anyone who has witnessed England trying to win the world cup in the last 50 years knows that there is nothing more dispriting than being set a goal that is inherently out-of-reach. Every organisation is made up of an array of entirely unique individuals, and therefore their finances are also totally unique.A savings structure that works for an unmarried, salaried employee, does not work for a zero-hours employee with three young children. Therefore, you should take care to ensure that you have (as far as possible) a realistic awareness of your employee base: income, dependents, financial obligations, and so on, in order to pitch savings content universally and representatively. 2. Focus on building savings habits Starting to save can be difficult – especially for those who have never done it. Savings campaigns should ignite a lasting commitment to saving, rather than set concrete parameters where some individuals, perhaps those who are attempting it for the first time, could fall at the first hurdle.Many of us are familiar with the NHS’s Couch to 5k running programme, and the premise is the same here. To build up a lasting behaviour requires incremental and manageable steps. Even if savings are dipped into to cover unforeseen expenses or smooth out income, the general trend is still upwards, Research carried out by Nest Insight reports that even if savings are dipped into to cover unforeseen expenses or smooth out income, the general trend is still upwards, proving the value of flexibility in the modern financial climate.This flexibility is reflected in the increasing popularity of microsavings and automated savings. An automatic ‘roundup’ feature where any expenditure is automatically rounded up to the nearest pound, with the spare change going into a savings pot, is one example.It’s crucial for business leaders to introduce a savings campaign that allows for flexibility. Why? Because the course of first-time saving never did run smooth, and flexible tools are the universal equaliser.

Cost of Living: 4 ways to support struggling colleagues

Is it too expensive for your staff to come to work? | Wagestream

Are employers putting undue financial pressure on staff to get to work when small changes could ease the burden? Internal policies and benefits are usually built to support colleagues in the workplace - whether that's equipment allowances, food and drink, or discounted merchandise; however, do those policies support your colleagues on reaching the workplace in the first place? Here we look at four different aspects of common workplace policies, and unpack how they could be putting undue financial pressure on workers' commutes. 1. Expenses reimbursement Do people wait six weeks to be repaid in your organisation? Long wait times can affect cashflow and budgeting in other financial areas - such as transport and groceries, especially if the expenses are significant and unexpected. Reimbursing expenses on a more regular cycle (especially within the same pay period) can help ease the burden, and ensure employees aren't stretched elsewhere in their budget. Better yet, if expenses are a big part of the job, is there a way to ensure every employee has access or a direct line to a company card? Not everyone needs one, but it’s useful if more people know they have the option to avoid absorbing the cost themselves. 2. Minimum contracted hours If only limited hours are guaranteed across a week and colleagues have expensive commutes, it may be that they are reliant on extra hours to ensure the job remains financially viable. This can cause anxiety and uncertainty, especially if rostering is dependent on short-term factors e.g. the previous week’s performance. Minimum contracted hours became a particular issue during the Covid-19 pandemic as organisations were forced to drop guaranteed hours to cope with fluctuating demand - however, most organisations are now in a better position to provide increased notice and certainty for their people. 3. Overtime pay Many organisations have different pay cycles for overtime and it can result in staff waiting more than a month to be paid for any overtime performed. If staff take overtime pay due to a short-term need for more money, the pay cycle can reduce any positive impact overtime could have on their financial wellbeing - particularly if they're shelling out extra cash to commute to those overtime shifts. Plus, if you pay sooner for overtime pay, you also strengthen the psychological link between work and reward, which may encourage your teams to take on more overtime pay, as they receive the money far quicker. Our recent research into flexible pay demonstrated that workers take on 11% more shifts when they have flexible access to that extra income. 4. Flexible working policies Flexible working is a very big term and means a lot of different things to different people. It’s linked to the nature of the organisation and the industry. But there are lots of examples of how rigid rules on flexible working can make it more expensive to come to work. For example, even a slight flexibility in start & end times can save people cash on car parking, peak time public transport, and extra childcare costs, to name a few examples. Also, allowing staff to easily swap shifts may mean parents who have to do school pick-ups can increase their hours more easily, and avoid imposing a forced cap on their earnings. Financial wellbeing strategies do not only have to look at new benefits and practices, but how existing policies can ensure that low-income workers aren't facing unnecessary financial obstacles; and generating excess worries alongside the already-stressful subject of money. For more ideas and actions to support your colleagues with financial wellbeing, read our recent research: Unlocking the Pay Cycle - which details the objective and subjective impact of giving workers choice over their own pay cycle.

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