The importance of financial education in the workplace is usually understood best by HR departments, but this importance needs to be defended better from a business point of view so it is translated into investment.
Katie Vye, senior money at work consultant, Jelf Employee Benefits said: “Few people would deny that financial education for all employees is a good thing. However, getting those outside of the HR function to buy in to the business benefits and therefore justify the investment, can feel like an uphill struggle.”
To help, here’s five (and a half) reasons why financial education should be on all organisations’ to-do lists from Jelf Employee Benefits:
- Engage staff with your company: communicating with your staff about the benefits you provide and supporting employees with financial education reminds staff how good an employer you are and this in turn will engender more productivity and help retention rates.
- Get better value from your current benefits: the more your employees understand what you are offering them, whether that be enhanced pensions contributions through to EAPs or wellbeing programmes, the more value the employee (and therefore employer) will get from them.
- Help your staff to retire when the time’s right: employers should want their employees to be in a sound financial position that enables them to make an active decision about when to retire. If an employee feels resentment because they have insufficient savings to step down, they may be unproductive or lack enthusiasm. Financial education enables staff to understand the importance of pensions (or equivalent) savings vehicles.
- Improving the wellbeing of staff: financial anxiety can quickly lead to stress, and stress is one of the biggest causes of employee absence. By offering financial education, employees can feel less stressed about their finances, more supported and motivated to take control of their own financial situation today and also to plan for the future.
- Tackle short-term rewards culture: offering pensions, group risk and healthcare benefits are significantly more valuable but often perceived as less glamorous than shopping vouchers or discount codes that could be offered by competitors. Unless you explain the differences and the longevity of the more robust employee benefits, some employees may be lured towards handbags and holidays which won’t help their longer-term financial situation.
5.5 It’s fun: historically very few people received any financial education at school and if they did, the emphasis was unlikely to be on making it enjoyable. However, insights from workshops show that when financial education is targeted, relevant and with specific outcomes, it is an extremely positive experience for employees.
Katie Vye concluded: “If delivered in the right way, financial education is surprisingly good fun too. Whilst this may not pass muster with senior management as a tangible reason to offer it, employees who feel their employer takes an interest in their situation outside of work as well as in it, are proven to be more committed.”