It has been a tumultuous year for HR and recruitment in the tech sector. Early this year, the UK tech sector was growing at 2.5 times the rate of the UK economy, creating opportunities left and right that offered increased wages, alternative company culture and innovative job perks to drive tech employees to job hop. However, this has since slowed down considerably. Over-ambitious growth amid a challenging market and an impending recession have triggered companies to step back, with Big Tech companies laying off thousands of employees.
While the employment market has undoubtedly slowed down, what remains consistent for employers across tech is the challenge of sourcing and retaining top talent; the most skilled in the field are consistently inundated with opportunities amid a UK-wide digital skills gap. When an employer secures such talent, they must find creative solutions to retain and nurture it- or otherwise face the daunting and costly task of finding a replacement.
Meanwhile, employees are battling the cost-of-living crisis, mounting energy costs and enormous inflation, all of which threaten their financial security. Living paycheck to paycheck, 72% of employees have been forced to prioritise immediate financial commitments over their long-term financial future, according to Mintago’s recent research. This will only get worse, 70% fear.
Employers must pivot their focus and concentrate on supporting their existing talent in order to retain it and avoid the difficulty of replacing valuable staff in a competitive market. With the cost-of-living crisis at the forefront of employees’ minds, providing high-quality financial wellbeing support that helps them to resolve money problems is surely the solution. Indeed, in the worst-case scenario, leaving employees to fight money worries alone could force them to quit their current position for a more beneficial opportunity elsewhere.
Why do financial worries affect staff retention?
It is essential, therefore, that employers recognise the severe ramifications that poor financial wellbeing can bring- employees overwhelmingly (56%) claim their money woes are the biggest source of stress in their lives. At greatest risk are an employee’s physical and mental health, with a quarter (23%) facing sleepless nights and a third (32%) having difficulty completing their day-to-day tasks as a result of financially induced stress. Such severe symptoms consume employees’ lives, consequently leading to unhappy and unmotivated workers who disengage from their work. This, however, is not an issue that ends with the individual. The businesses they work for similarly take a hit, due to the decrease in productivity and overall weaker job performance.
An equally important consideration is how employees perceive management’s response to financial troubles, particularly in an economic period where employees are impacted almost universally. Concerningly, less than half of managers (46%) consider supporting staff during the cost-of-living crisis to be their employer’s responsibility. Most certainly, this refusal to step up will be interpreted as a lack of interest and appreciation for employees, leading to lower job satisfaction and demotivation, not to mention staff feeling overwhelmed by their financial situation. Critically, it will drive employees to resign in search of financial security and adequate employer support.
On the contrary, employers can reduce the strain of financial woes by supplying staff with financial support that will allow them to take greater control of their finances. As a result, employers can expect happier staff who are keen to fully immerse themselves in the company and their work, to the significant benefit of both parties.
Giving employees financial wellbeing tools
Employers may be initially surprised to hear that financial wellbeing support does not necessarily translate to significant payroll cost increases, such as pay rises, bonuses or promotions. Instead, the aim should be to equip employees with the tools that enable them to take charge of their financial situation.
Financial wellbeing platforms – like Mintago – are one such tool, hosting a variety of resources including educational materials for bridging gaps in employee financial literacy, services that facilitate employees to track lost pensions, as well as offering savings benefits. Such platforms similarly recognise that one of the greatest challenges in maintaining financial wellbeing is simply keeping track of all of one’s various financial investments and commitments, streamlining this by displaying them on a single dashboard.
Where an employee may be grappling with a niche financial concern that they are unable to resolve alone, financial wellbeing platforms can provide them with access to expert financial coaches and advisors. Employees can benefit from their bespoke advice to overcome the issue, an offering that is frequently otherwise inaccessible.
Having been fully equipped with the resources and knowledge required to address any financial concerns, employees will be far better positioned to fight the cost-of-living crisis and make smarter decisions with their money. In turn, this should alleviate some of the burden of stress associated with poor financial wellbeing. The benefits of providing financial support also extend to businesses; a solid support strategy from their employer and lessened money worries will lead to higher employee satisfaction which subsequently incentivises staff to remain with their current employer.
Keeping staff content within their role and supporting them through a challenging economic climate should always be one of an employer’s top priorities- but when an employee’s skillset is a rarity, as is often the case in tech, it becomes a necessity for a businesses survival. When employees feel in control of their finances and, critically, feel that the issue has been addressed by management through strategic support, they are compelled to stay in their current role.
Chieu Cao is CEO of financial wellbeing solution Mintago.