Helping your workforce understand how their finances work can have a broader impact on their overall wellbeing, by boosting their personal empowerment, as Sonia Rach explains
Financial worries are costing businesses £120bn a year, with at least 17.5 hours lost a year as a result of employees taking time off work because of financial stress. According to financial service firm Neyber’s DNA of Financial Wellbeing report, 55% of employees said being under financial pressure affects their behaviour and ability to perform in the workplace. The report also found that 50% would value financial assistance from their employer.
Financial education can build economic awareness and offer people the help they need to improve their situation – or simply build the financial acumen to save the money they need to attain their goals. It could be about helping to manage debt, save for a house, or make appropriate pension contributions.
Monica Kalia, the co-founder of Neyber, says: “Financial education must offer employees the appropriate support they need – and in many cases, this needs to be personalised. Just like at school, not every teaching method is right for every pupil.
“Some prefer face-to-face, one-to-one tutorials, whereas others may want to go away and digest the information in their own time. No matter how your employees prefer to learn, there are endless ways to offer them training in financial wellbeing.”
But how? The options can range from videos, podcasts and portals to focus groups, career seminars and internal courses. Asesh Sarkar, the chief executive of Salary Finance, says: “It’s typically most effective to start by understanding topics employees need education on, and then to look at the options for delivering education in each topic.”
However, when it comes to implementing a strategy, there are different approaches. Personalisation is key. Jonathan Watts-Lay, director, WEALTH at work says: “Employees will each have individual circumstances which are likely to result in different savings priorities, which is why a ‘one-size-fits-all’ approach doesn’t work.”
He says: “For employers, a relevant and well-communicated benefits package not only helps recruit the most talented individuals but it can also help retain a happy and committed workforce.”
So it’s a great way to boost morale. Jeanette Makings, the head of financial education at Close Brothers, adds: “It should make a difference to the financial wellbeing of the individual employees, and it should also improve retention, engagement, productivity and employee transitions for the business.”
However, this is not possible simply through information. She says: “Information has to reach employees, inspire them and give them the confidence to actually act.”
So how can we ensure this? Understanding the demographics of a workforce is essential to selecting the right form of communication.
“If you send out pension information by email but open rates are low, then it may be time to look at new method of delivering communications,” says Dominic Fryer, head of corporate pensions at Aviva.
“It really comes down to knowing your workforce and factoring in affordability. One-on-one, face-to-face sessions are arguably the most effective form of financial education.”
Providing staff with the feeling that they are controlling their finances will help their overall wellbeing. Unsurprisingly, it will reduce stress levels and anxiety but it will also benefit the employer by having a happier and more productive workforce.
However, the question remains: is it enough to demonstrate the return on investment? The answer is yes. ROI becomes far simpler to demonstrate when you’re able to convey the hard facts of how it is having an impact on a workforce, the benefits to the employees and the cost savings to employers.
The measures of success combined with the benefits to staff and employers creates a well-thought out case. Salary Sacrifice’s Sarkar says: “Understanding what employees need is fundamental to success. The ultimate aim of financial education is to help people gain control of their finances, to have a buffer for unplanned spend, and to save towards their goals.”
TOP TEN TIPS
1) Make it relevant by understanding the demographic of your workforce
2) Communicate effectively and make it engaging; be it digitally or in person – execute it well
3) Ensure there are clear key objectives and targets to enable success to be measured
4) Create a safe environment where people can build their knowledge by providing supportive communities
5) Try to illustrate the benefits of an increase in employee wellbeing; highlight staff absence and productivity
6) Review regularly, understand the feedback and input frequently and act on it
7) Work out your budget: ensure the benefit outweighs the cost
8) Understand the specific issues employees need help with, and design a tailored programme
9) Learning styles: understand how your staff learn
10) Provide support outside of work for those who may not be comfortable talking about finances in the workplace