Project Spotlight: Health, wealth and happiness
When Agilisys found that many of its workers were struggling with personal debt, it launched a financial benefits platform to help them. Hear what HR Director, Simon Mounsey said about SalaryFinance.
Soon after IT and business service provider Agilisys became an employee-owned company run through a trust, it discerned a direct link between an individual’s financial health and productivity. It was a timely discovery, given that the new operating model aimed to provide the 1,800-plus staff with ‘greater engagement and ownership in how the business operates’ so that they can ‘add value to ensure future growth and achievements’, according to the Agilisys website.
The business motivator
Agilisys conducted an internal survey to understand the levels of financial stress among its workforce. Consistent with figures across the UK, the results highlighted that many employees had significant levels of personal debt, with some paying exorbitant interest rates. Based on these outcomes, Agilisys concluded that, if it could help staff improve their financial health, it would be something that they would value and could make a significant positive difference to both their home and work lives. Looking beyond its duty of care to employees, it realised that all parties could gain from the arrangement.
‘Helping to improve someone’s financial situation can make an appreciable difference to their engagement, happiness and productivity,’ says Simon Mounsey, Agilisys’s HR director (pictured). ‘If our employees are happier, we have a more productive workforce, so the employer benefits too. It’s a win-win.’
Financial health
In the US, studies have shown that productivity for each worker affected could decrease by 20 hours a month, according to the Journal of Employee Assistance, while a Federal Reserve report showed how financial stress costs an employer on average $5,000 a year for each employee.
This equates to $230bn in lost productivity annually.
In the UK, individuals who report better financial wellbeing are 1.5 times more likely to say their productivity has increased during the past year, according to a report by the Institute for Employment Studies.
Agilisys believes that employers that consider and support their workforce’s financial health will see the return on investment in improved attendance, retention and productivity measures – particularly in periods of global economic uncertainty.
An interesting solution
SalaryFinance, a financial employee benefit, had an interesting solution. Founded by the former MD of Google UK, Dan Cobley, the company helps employees to reduce their personal debt and save towards goals.
The platform enables people to consolidate their personal debts into a single, low-interest, fixed-rate loan that is repaid through the payroll rather than by direct debit. This makes finances easier to manage and cheaper to service. It cuts the cost and interest rate to about one-third of the market average (7.9% APR) due to the reduction of risk.
Employees’ interest rates are not based on conventional factors such as credit score or income level. Instead, the only prerequisite is that they have been working with their employer for a year or more.
For people with a less-than-perfect credit history, and whose only recourse may be interest rates of up to 1,000%, SalaryFinance can be a lifeline. The service is free to organisations and helps their staff to reduce their personal debts quicker, increasing their disposable income and making their pay go further.
‘When we first heard about it we thought it sounded good in principle, but we were sceptical about how valuable it would be and whether we wanted to be involved with it,’ explains Mounsey. ‘We then put it to our employee forum and the support for the service was so strong that we decided to pilot it.’
The interest rate is fixed and is the same for all employees, regardless of credit score or income. By collecting repayments directly from salary, rather than direct debit, SalaryFinance reduces risk and cost to the lender, allowing these savings to be passed on to the workforce.
While attracted by the benefit for employee owners, and to further differentiate itself by being one of the first businesses in the UK to pilot this approach, Agilisys had questions about how the benefit would be perceived, how valuable it would be and whether it was ethically right for an employer to support lending of any kind.
‘Our position is very clear and is supported by SalaryFinance’s approach – we won’t encourage employee owners to take on debt, but we do encourage them to consider whether they can save money on existing debts,’ says Mounsey. ‘That said, it also appeared to be a great opportunity, so we did the obvious thing as an employee-owned business and asked our employee owners.’
Improving wellbeing
The business provided information to employees and ran a survey to understand the need and potential take-up of the benefit. The support and interest for the platform was very positive, so it signed up to the pilot scheme across its customer services business.
Initially, Agilisys ran a six-week trial, during which it noticed that the platform was delivering benefits to those who used it.
Employee owners taking advantage of the benefit have been reducing their debt, by £540 a person on average. One individual managed to cut their financial burden by £1,400 (more than £116 every month).
‘The feedback we received has been extremely positive and prompted us to offer the benefit across our business,’ adds Mounsey. ‘Given that financial concerns are one of the biggest causes of stress, we believe that the platform has helped to improve the financial wellbeing of many of our employees.’
Measuring results
Before fully implementing SalaryFinance, Agilisys had in-depth conversations with its employee owners who had taken out a payroll loan during the pilot.
During implementation, a staff survey measured its use and effectiveness. On the strength of this feedback, the business made the decision to roll out the platform across the rest of the company.
Mounsey says: ‘In addition to the feedback we received from staff who signed up to the scheme during the pilot stage, we also got enquiries from a number of staff who would have liked to apply for SalaryFinance but who were not in the initial pilot group. Needless to say, we have begun getting these employees on board, too.’
Further support
Agilisys offers its workforce an employee assistance programme with a financial element, as well as guidance and support for its workforce.
The company is also trialling another financial wellbeing benefit, the Squirrel platform, which helps individuals save and manage their finances more effectively.
‘We’ll be embracing our employee ownership status and looking out for more innovative platforms that benefit our employee owners and our business,’ concludes Mounsey.
