Being financially secure - an important part of our wellbeing

Everyone wants to know that they and their loved ones are in the best of health. At the latest since the start of the Covid-19 pandemic, the topic of wellbeing has also become more important for employers. This was confirmed in recent study findings by WTW in spring 2021.

The Wellbeing Diagnostic Survey Switzerland not only shows that the topic of wellbeing has moved up the priority list of employers, but also that Switzerland clearly has some catching up to do. For example, although many companies already offer various wellbeing programmes and initiatives, they do not have a formally articulated strategy in place.

As an integral part of employee benefits, the first step is to tailor wellbeing programmes to different employee needs and segments and to market offerings accordingly. Another key to success is an enabling physical and technological work environment and the involvement of employees in the design of any wellbeing offerings.

Employees want to be heard. More and more employers are recognising this and are giving their employees a voice, for example through surveys or virtual focus groups. This helps to ensure that programmes meet their needs and expectations. These factors, and a healthy company culture, not only serve to increase the engagement in wellbeing programmes, but also to achieve the desired positive effects such as reduced absenteeism and increased employee motivation.

Traditionally starting with initiatives that focus on the physical wellbeing of employees (e.g., through ergonomics and health days), the time has come to work on a holistic approach. In addition to physical wellbeing, attention should also be paid to the emotional, social, and financial wellbeing of the workforce.

Fig. 1: Prioritised wellbeing dimensions for the next three years

Physical Wellbeing 88 per cent, Emotional Wellbeing 96 per cent, Financial Wellbeing 47 per cent and Social Wellbeing 80 per cent.

Percentages indicate “Important” or “Very important”

Source: 2021 Wellbeing Diagnostic Survey, Switzerland

In the next three years, a strong increase in emotional, physical, and social wellbeing programmes can be expected.

Even if, when compared on a global level, employees in Switzerland are well covered by the social security system, the financial dimension should not be disregarded.

As with all dimensions of wellbeing, each employee will have a different starting point depending on their age or other individual circumstances. For example, some may already need support in assessing and managing financial commitments, others may be a step further and need advice on how to best meet their financial goals or how to absorb a financial shock in exceptional circumstances.

To support employees on their journey to the ideal state of financial security, employers can use a variety of tools, whether it is one-on-one financial counselling on short-term financial issues or proactive assistance around retirement plans.

Fig. 2: Top two priorities

For 20 per cent, it is setting and tracking specific metrics and targets at key financial decision points and for particularly vulnerable segments. In den nächsten drei Jahren kann vor allem mit einem starken Zuwachs an emotionalen, physischen und sozialen Wellbeing Angeboten gerechnet werden.

Percentages indicate “Planning action for 2021” and “Considering action for 2022 or 2023”

Source: 2021 Wellbeing Diagnostic Survey, Switzerland

If you ask Swiss employers, the emerging focus for the next three years is the offering of financial webinars that educate on various financial issues that employees might face.

In addition, greater attention will be paid to the use of specific metrics and objectives in financial wellbeing programs at pivotal financial decision points and also to segments most at-risk.

Consulting practice shows that employees need support above all at those "moments that matter", for example when buying a home, starting a family, getting married or divorced, or in the event of a serious illness or the death of a family member.

Even though the topic of pension provision is relevant for all employees, it often only gains significance for them with increasing age. From the employer's point of view, it is important to proactively point out pension plans and their importance to employees, in order to close potential knowledge gaps as early as possible.

Fig. 3: Emerging focus for the next few years around the topic of retirement benefits

Number two in communicating to all employees how the decline in equity markets is affecting retirement savings, and number three in communicating with employees nearing retirement about the decisions they need to make in the current environment.

“Not applicable” and “Not sure” option excluded.

Source: 2020 COVID-19 Benefits Survey, Switzerland

Results of the 2020 WTW Covid-19 Benefits Survey in Switzerland show that employers intend to focus on enhanced tools and educational materials. As a precautionary measure, employees should be educated about a potential decline in equity markets and its impact on retirement plans, and employees approaching retirement should be provided with decision-making tools.

In practice, needs change depending on the age group. While younger generations tend to appreciate general information about the state pension system and how it can be used, people who are planning for retirement need more specific information about their expected retirement benefits and how they can positively influence them. Employers should start raising awareness of pension topics across the workforce at an early stage and should also provide information on topics such as the relationship between own remuneration, regulatory and voluntary savings contributions, and the resulting retirement benefits.

Many HR managers are probably of the opinion: "We already provide this information to our employees.” The challenge in the coming years, however, is to supplement the information that is already distributed in a scattergun approach with targeted offers for specific financial situations of individual employees. Information is effective when employees understand what they can do, where they have choices and how their choices affect them financially.

It is no coincidence that communication and training on the topic of pension provision are now referred to as financial wellbeing services. Studies show a direct link between an employee's emotional and physical health and their financial situation. For example, employees with financial problems take twice as many days off work as those without financial worries. The risk of emotional or physical impairment also correlates with the financial situation.

Along with the enhancement of existing offers, a cultural shift should also take place. Just as the emotional health of its employees should be important to the employer, it should also be aware of its social responsibility regarding the financial security of its workforce. In this context, it is not enough to offer insurance and pension solutions that are in line with the market. On the one hand, it is not always an insured event that causes a financial shock, but for example a divorce, the loss of a partner's job or a serious illness of a family member. On the other hand, financial worries can also be caused by a lack of information or knowledge.

It is important that the employee has a trustworthy point of contact to which he or she can turn. The quicker they get help, the quicker they can focus on their job again.

The pandemic has caused many low-wage workers who were on furlough to struggle with the financial consequences. But not only that: there is a lack of understanding of why less pay was paid out and how it is calculated. In addition to the lower salaries, there is also uncertainty as to whether the employer is accounting for everything correctly, which is ultimately not very confidence-building.

In summary, Covid-19 has taught us that tailored communication and engaging tools are key to creating a positive employee experience. In turn it is necessary for employees to be both aware of and take advantage of the wellbeing offerings, which ultimately helps to reduce absenteeism and disability and keep employees healthy and engaged.

Key findings

• Covid-19 served as a wake-up call for employers. Wellbeing issues are gaining importance in Switzerland
• A holistic approach to wellbeing encompasses physical, emotional, social, and financial components
• Developing a strategic approach to wellbeing is not only for long-term sustainability, but also to attract new talent
• An enabling physical and technological environment improves the employee experience and the use of wellbeing services
• Swiss employees are well provided for by the social security system in international comparison, but there is still potential for improvement
• Financially secure employees have only half as many lost days as employees with financial problems
• Educational work on precautionary topics cannot start too early
• Specific support on "Moments that matter" should be offered as needed
• A trustworthy, independent point of contact can help employees to quickly refocus on their work