• Wed. Jan 12th, 2022

Will the increase in the national minimum wage promote the financial well-being of staff? – Social advantages

ByJulie J. Helfer

Jan 4, 2022

Employee well-being has played an important role in attraction and retention strategies for several years, focusing primarily on mental health and work-life balance. Financial wellness is a welcome addition to this agenda.

Many researchers have shown that financial stress is one of the most important causes of absence and loss of productivity among employees. Debt and unexpected bills can trigger anxiety and other mental and physical health issues, but money makes the world go round and advertisers continue to saturate potential consumers with bigger and better things to spend. These challenges are often compounded by the fact that young people who drop out of school continue to enter the workforce without any financial education behind them.

Point? The national minimum wage alone cannot support the financial well-being of employees. Employees must be informed and empowered to make informed financial decisions, regardless of their earning potential. Some employers have stepped up in this area, offering budgeting tools, financial planning support, early salary access programs, financial health clinics and referral tools, to name but a few. .

The national minimum wage plays an important role in setting a benchmark for employers when it comes to compensation. However, employers should be encouraged to review their salary structure as a whole and revisit their own business model. Some companies have struggled to survive the pandemic and the increase in the minimum wage in April 2022 will be seen as another hurdle to overcome. Others have prospered.

Employers should consider fairness throughout their reward structure when implementing a financial wellness strategy. Remuneration is one tool, benefits another, education also plays a role. The true benchmark for the positive financial well-being of employees is a fair compensation structure that reflects company performance and individual responsibility for roles, while providing the tools to support, educate and inform employees so that they make sound financial decisions.

Samantha Johnson is Policy Officer at the Chartered Institute of Payroll Professionals