Global financial wellbeing trends 2024
2 min read
Reading economic forecasts for 2024 from: The Economist, The FT, The New York Times, and Bloomberg, there is no consensus view on how the year will pan out.
“The bout of global inflation will disappear as quickly as it came.” “Inflation will stay higher for longer than expected.” “A Wall Street rally could continue to surprise on the upside.” “Global stocks will come under sustained pressure as the economic outlook weakens.”
Uncertainty, volatility, and risk seem to be the only certainties as we consider the global economy and the effect on the personal finances of citizens around the world.
The most profound impact on the economy will be geo-political. Tensions are rising in the Middle East, the war in Ukraine will enter its third year and there is a growing gap in understanding between western democracies and those countries with different forms of government. By way of example, one third of global container trade travels through the Red Sea, and as we witnessed in 2021 interruptions to global supply chains increase inflation, which then feeds through to consumers with higher costs for goods and higher interest rates.
Another key driver of uncertainty will be the record number of elections being held in 2024. At least 40 elections, impacting over 50% of the world’s population and representing over 60% of global GDP will be held. Elections typically bring rafts of legislative change, increasing complexity and the need for good decision making by individuals and families. We saw this over the last few years in the US, with new legislation to navigate such as the Secure Act 2.0 and The Inflation Reduction Act.
Helping employees to navigate the personal finance maze and enable them to bring their best selves to work, is driving employers to prioritize the financial wellbeing of their people on a global scale. Many now consider the global financial wellbeing of their people as “mission critical”.
When we are consulting with companies on how to approach the topic, many don’t know where to start. What follows is my advice on what to think about.
Firstly, when we consider how best to approach a global financial wellbeing program there are three key layers to the onion that guide the design and delivery of a leading service:
- Macro – the big global forces and trends, such as 44% of employees feel anxious about their finances, 63% not saving enough and only 25% feel that they are prepared for retirement. These statistics come from our independently verified global research.
- Local – what’s happening in that country, including legislative and tax change.
- Company – what are the goals and priorities of the company. Such as supporting the DE&I agenda, increasing engagement with company benefit programs and helping the globally mobile workforce. “What are we going to point this program at and why?”
It is important for companies to understand what problems they are trying to solve and what opportunities they want to unlock. In our experience, when HR teams are clear on these points, they are more likely to receive company backing and find it much easier to measure and prove return on investment.
To ensure maximum impact, programs should be aimed at 100% of the employee population and the breadth of content should reflect this. From those who need budgeting 101, through to those with more complex financial situations.
Good data is key to aid decision making. Many of the global companies we work with center their whole program around our Financial Health Check-Up tool. The tool enables employees to assess the five core areas of their financial health (borrowing, learning, saving, planning, and spending) and provides tailored recommendations to the employee on what action to take. We are then able to anonymize and aggregate the data and play back to HR the financial health of their people by country, by region, and globally. That data informs their global strategy and enables evidence-based decision making.
Volatility means that accessing a regular financial health pulse, will also mean they can be nimbler and targeted in their approach, rather than throwing mud at the wall and hoping it sticks. For example, if we see a growing trend on debt among a particular cohort in a particular country, mental health resources or the EAP can be promoted to them in a very tailored way.
A common comment from the HR people we speak with is how to internally resource for a new program, particularly where they have a lean team. We advise that the service is as automated as possible, with a clear calendar of events that tie back to the company strategy. For example, campaigns around World Mental Health Day, International Day of Women, and annual enrolment. Even the most complex company can be set up so this is light touch, and high impact.
Finally, we strongly recommend that companies build their particular benefit programs into the service, providing education on the company stock, retirement, and wellbeing plans. Driving more value from existing spend and ensuring you have a joined-up user experience will be a significant driver of ROI.
Although 2024 will be challenging, we know that delivering financial wellbeing support on a global scale is one of the most rewarding career highlights for ambitious, progressive HR teams. After all, money touches every part of our lives and building a positive relationship with it creates health, wealth, and happiness.
If you more global financial wellbeing trends then why not start by exploring the current state of people's financial health in our global financial health pulse.