Opinion: It’s time to talk about financial wellbeing

Author: U-Bond Wong | Date: 16 Dec 2015

Organisations should take an active role in educating staff around money, says U-Bond Wong of Aon Hewitt

Employers are increasingly concerned with the financial wellness of their staff and how they can play an active part in providing employees with greater access to financial education and advice.
 
The erosion of consumer confidence towards the financial services industry after the global financial crisis in 2008, and the resulting regulatory changes, have caused employees to reach out for guidance on their financial wellness from less traditional channels, such as their employer. Their desire is for employers to introduce trusted partners who will be able to provide unbiased insights and direction.
 
The recently released ‘Hot Topics – Retirement 2015’ report by Aon Hewitt found that 93 per cent of almost 250 employers surveyed were “very or moderately likely to create or broaden their efforts on financial wellness topics in a manner that extends beyond retirement decisions.”
 
Many organisations understand the ethical and business reasons for developing and pursuing a clear corporate social responsibility (CSR) strategy. Now there is a compelling argument for organisations to be more explicit about the links between their CSR objectives and their employee wellbeing and engagement strategies.
 
In 2012, organisational psychologist Philip H Mirvis cited, in his California Management Review article on employment engagement and CSR, “several examples where organisations such as IBM and Unilever have used CSR as a tool to recruit, retain and engage employees.” Another survey found that employees who approved of their companies’ commitments to social responsibility were more engaged in their jobs and more inclined to believe their employers were interested in their wellbeing.
 
If employees are financially secure, they are less distracted and their productivity is maintained at least at the status quo, or improved. Loyalty, higher engagement levels and better morale ensue when an employer is seen to be caring about the total financial wellbeing of an employee. A sense of financial wellbeing creates a positive ripple effect for both employer and employee.
 
In view of significant changes to the population demographics in Asia, the pressure to provide for the wellbeing of the extended family has never been greater, and the burden of financial wellbeing extends beyond the traditional western family nucleus. The Asian cultural heritage and current economic realities have created an expectation (or obligation) that grandparents and parents will be financially provided for in their old age.
 
In Singapore, the government has introduced several initiatives over the last few years to mitigate the risk of redundancy and encourage residents to prepare adequately for their retirement years. Similarly, the Hong Kong Government has committed to providing a sustainable healthcare system by improving the accessibility, quality and transparency of hospital insurance.
 
Employers face continuing pressure to balance benefit offerings with budget realities and still meet employee needs. It is virtually impossible for an employer to provide an employee benefits package that meets the particular needs of every individual employee. Consequently, many employees find themselves with benefits that are not relevant or lack the desired level of coverage and protection for their dependents.
 
A real and immediate opportunity exists for employers to improve their employees’ financial wellness and overall contribution to society by putting in place wellness programmes that educate employees about the financial risks they face, providing the tools they need to manage those risks, and the means to implement any changes required.
 
Today’s employers are facing bigger challenges related to sourcing, offering and servicing their benefits programs. A well planned and successfully executed financial wellness education programme, run in conjunction with an employer’s corporate social responsibility strategy, can provide everyone with some very tangible wins.
 
U-Bond Wong is the relationship manager for health and benefits at Aon Hewitt, based in Singapore.