Supporting employee financial wellbeing: Leek Building Society

Leek Building Society has a very clear purpose and a fundamental part of that is to make a positive difference to the lives of its staff. Driven by this purpose, and in recognition of the cost-of-living crisis, Leek Building Society has taken several steps to promote workplace financial wellbeing, namely:

• launching a workplace saving scheme which included a financial incentive to promote savings habits for lower earners.
• awarding a lump sum cost-of-living payment to all staff.
• maintaining their commitment to pay the voluntary real living wage. In November 2022, they implemented the increase that was announced by the Living Wage Foundation in September and backdated it to 1 January 2022 – going far beyond what was required.
• providing staff with a general pay rise in November 2022 and backdating it to the start of 2022, giving colleagues a welcome lump sum at a time when bills were really starting to rise. The pay rise was tiered with lower earners receiving a higher percentage increase.
• increasing the employer’s contribution to the workplace pension scheme to 7.5%
• improving pay rates for sickness, maternity, paternity, adoption and shared parental leave.
• providing additional support to staff facing challenges linked to increased cost of living.
• introducing free health screening for all employees.
• introducing Grandparent Leave, providing paid time off for staff to support their family following the birth of a grandchild.

Workplace savings: Stark data indicated that going into lockdown 11 million people were non-savers including 7.5 million workers. When that was overlayed with the fact that people with money worries are 5 times more likely to be depressed and 9 times more likely to have sleepless nights, Leek Building Society decided to do something to help their staff develop savings habits that would help combat these statistics. In June 2022, the Society launched a savings plan via payroll deductions, with no minimum payment needed, and a financial incentive for lower earners. When an employee who was eligible for the incentive had contributed into their savings account for six consecutive months, the Society then credited their instant access savings accounts with £100, irrespective of how much they had paid in. The Society put this incentive in place to really support lower earners given they were more likely to be in the cohort of non-savers mentioned above and would therefore help them to have savings available for an unexpected financial emergency. 

Cost-of-living payment: to support their staff through the cost-of-living crisis, the Society awarded a £1,600 supplement to all workers (prorated for part-timers). 

Living Wage: The Society signed up to the Living Wage Foundation’s (LWF) Living Wage at the end of 2021. In September 2022, following the LWF’s announcement of the new rates for the voluntary Living Wage, the Society not only implemented the increase in November, but also back dated it to the start of 2022. While the Society didn’t have to do this, they felt that it was the right thing to do for their lower paid staff.

2022 pay rise: the Society focused its pay rise on the lowest earners. Those on the Real Living Wage received the highest increase in percentage terms, followed by low earners; then middle earners and then the highest earners. All these changes were made in November 2022, again backdated to the start of the year.

Increasing the employer pension contribution: In December 2021, the employer uplifted its pension contribution from 6% to 7.5%, without requiring any increase in the minimum contribution required from staff, which remains at 3%.

Enhanced occupational sick pay scheme: previously, staff received one month’s full pay if they were off sick, but in December 2021 this was increased to six months for those with serious health conditions.

Improved maternity, paternity adoption and shared parental leave pay: maternity and adoption pay has increased from the statutory levels to three months on full pay, three months on half pay and the rest on SMP. Paternity leave is now 2 weeks of full pay in addition to 2 weeks of statutory.

To find out more about why Leek Building Society made these recent changes, we spoke to Rob Longmore, HR Director, and Lizzie Hall, Head of HR.

A: In 2019, the HR function became a more strategic part of the organisation, with a seat on the executive committee. Since then, decisions have been consistently considered through a people lens and wellbeing generally has become a real workplace priority and a key feature of our people strategy. We took a strategic view to how we could offer more support to colleague’s financial wellbeing as outlined above which was supported by our other people management practices including a greater focus on physical and mental wellbeing.

Workplace savings: there were some interesting statistics that came out around the first COVID lockdown. 11 million adults were non-savers, including 7.5 million workers. That was quite stark. When you think 11 million aren't savers, you’d maybe assume they’re predominantly people without jobs, but the majority were indeed in work. The same research also identified that one-in-four households had savings of less than £100. Other research findings that influenced our decision to offer this benefit was that those with money worries were 9 times more likely to have sleepless nights and 5 times more likely to be depressed. Setting up a savings account for staff that could act as an emergency fund would not only help them if there was a crisis, but it would also give them peace of mind that they had a safety net they could fall back on if something unexpected happened. We incentivised this scheme for lower earners given this group might be less likely or able to already have a regular savings habit.

Pay rise: While we were very careful to balance several factors including business performance, economic conditions, and sustainability, we awarded staff a pay rise towards the end of 2022. To reflect the cost-of-living crisis, we gave those on lower wages a larger pay rise in percentage terms than those on higher salaries. Similarly, to help with increasing costs, both the rises in the voluntary Real Living Wage and the general staff pay rise were back dated to the start of the year. This gave staff an additional lump sum in November 2022 to help them with the extra costs of winter in addition to the higher ongoing salary. 

Cost of living payment: we wanted to help our people as they navigate the challenges of the current economic environment, especially the rise in fuel bills. We paid half of the lump sum in November 2022 with the second half to be paid in April 2023 to provide an additional boost to finances as we come out of the Winter. This has been incredibly well received by staff with 98% of colleagues feeling that we’ve handled the cost-of-living crisis well and have compassionately supported them throughout this period.

Maternity, paternity, adoption, and occupational sick pay: we wanted to give support to colleagues who had become parents so that they did not have the financial pressure to rush back to work at the expense of bonding with their new child. Similarly, we didn’t want our staff to worry about what could happen financially if they fell seriously ill. When we relate this back to our purpose and our commitment to making a positive difference to our staff, it’s just the right thing to do.

Cost-of-living supplement: before we gave this payment, we did talk to several staff members to understand how the cost-of-living crisis was impacting them to ensure we were fully informed. We also wanted to be seen as being fair, so while we offered this payment to everyone, it was prorated for those that work part-time.

Sick pay: while the benefit has now been extended to six months for those suffering with a serious illness or condition, if someone did need an enhanced payment for longer, we would treat each instance on a case-by-case basis to make sure we appropriately take care of our staff. We’d look to understand each individual’s situation so we can be really supportive, and there's lots of examples where we've gone above and beyond. It is a little easier for us to do this though as we only employ around 200 people. Obviously, this would be a lot harder if we employed thousands of people.

A: In terms of our payroll savings plan, about 40% of the workforce is now contributing to the scheme, saving around £2,500 per month between them.

At the end of November 2022, we carried out an all-staff survey, which had a 92% response rate. The survey found that:

• 98% of staff agreed that the employer has handled the cost-of-living crisis well, and it's compassionately recognised its impact on staff and members.
• 97% agreed with the statement that the Society's action with my remuneration shows it cares about me and my family.
• 97% agreed that the organisation has a strong social conscience.
• 95% would recommend us as an employer of choice to family and friends.
• 92% agree that we care more about our staff than most organisations they know.

As might be expected, we were incredibly proud of these results, but we won’t be resting on our laurels as we are continually looking for ways to go even further.

A: I think there are a few things:

• have a robust people strategy that forms part of the overall business plan. This really helps make sure that the actions that result from this strategy are going to add value, linking to overall business success.
• be clear about what you’re trying to achieve. Get the objectives agreed early on and plan the approach to ensure that these objectives are met. The things that we did, we didn’t just stumble on them, they've been things that we've thought through, we've planned in, and then delivered.
• regularly use people and business measures and survey feedback to check progress of the initiatives.
• use these measures to identify emerging issues so that can deal with them in an agile and strategic manner. You can’t rest on your laurels; the world moves on so you always need to think about what else you can do.

Caring for your people isn’t just the right thing to do, it brings tangible benefits to your organisation as can be seen in the results above.  Investment is required – whether that is uplifting salaries or investing in attractive benefits for employees – but the companies who champion their workers are without a doubt the ones better able to weather the storms, serve customers well and thrive as a business.