- Financial education
- 6 minute read
The last few years have really emphasised how important financial wellbeing is to employees and employers alike. Money worries are weighing heavily on the minds of employees, and it is having a knock-on affect on performance and productivity. Poor financial wellness can also have an impact on overall wellbeing, resulting in absenteeism, stress and disengagement.
Financial education for employees is no longer simply a perk. It’s becoming a necessity, and a benefit that could sway the mind of a high-performer, making all the difference between choosing a position with your company or with a competitor.
In fact, in their annual survey on employee benefits, the Society for Human Resource Management (SHRM) found that financial wellness is one of the top workplace benefits employees are looking for in 2020.
Since this survey was conducted, events have occurred which have affected the economy and disrupted the finances of many employees. We’re living in difficult times, and businesses are likely to feel the financial strain — as are employees.
Below, we’ll explore why financial education for employees is a must-have benefit for businesses in 2020, and for the years to come.
Employees need advice during the Coronavirus Recession
Since Coronavirus arrived in the United Kingdom, we’ve had to make adjustments in the interests of public health. This resulted in a lockdown, with shops, restaurants and businesses across the country closing their doors for the foreseeable future.
As was expected, Coronavirus has had a momentous impact on the World’s economy, prompting an ongoing and severe global economic recession, which is now being referred to as The Coronavirus Recession.
This recession is believed to be the steepest economic downturn since the Great Depression — far worse than the economic decline of the Great Recession in 2009. The lockdown has tipped the UK economy into the biggest slump on record.
In fact, some sources are suggesting that British pensions are set to take a hit from this market tumble, with some experts advising people not to withdraw funds while values are low.
At uncertain, unpredictable and overwhelming times such as these, employees will have a million unanswered financial questions. Having an expert in place to discuss their concerns will help put their minds at ease and give them a sense of security during a time when they need it most.
Related: How to protect employee health and wellbeing during Coronavirus outbreak
Employees want advice on home ownership
Home ownership in the UK has plunged for people aged 35-44. Compared to 20 years ago, these adults are three times more likely to rent, with one in three of millennials never expecting to own their home. Of course, long-term private renting is a financial burden on employees, and one that will represent an even bigger concern as these employees near retirement age.
Employees still want to own their own homes. It’s just that, for many, it might feel like a pipe dream. Financial advice and education at this time can make a real difference.
With guidance and a plan, employees might be able to put themselves on track to own their own home and to be on a more secure financial footing. And the more secure an employee feels at home, the better able they are to focus and perform while at work.
Your workforce is worried about debt
To cope with various financial pressures, strains and expectations, UK employees are beginning to borrow and build up debt, the average UK personal debt per household, including mortgages is £60,363. Per adult, this figure is £31,845, approximately 112% of average earnings.
Being retired and in debt is a very real prospect for some employees, and one that nobody wants to have to face.
The average Brit is hugely concerned over their debt, but finds it difficult to discuss. In fact, most Britons find it easier to talk about their mental health than to talk about money problems in particular.
This is something we need to address head-on. Employees need help with their finances, and it begins with opening up a dialogue and creating a culture of trust within your organisation.
The right financial education programme can demonstrate to employees that they are not alone, and that it is possible to put their debt behind them with a carefully considered plan.
Related: 8 ways of measuring employee financial wellbeing
Financial education gives employees a sense of control
As with many aspects of life, when we are given the tools, training and help required to address a problem, we are more confident. We feel better able to attack our issues and resolve them.
Without appropriate financial education, money worries can feel all-encompassing and overwhelming. Empower your employees and give them the control they need by giving them the tailored education they need.
As soon as their issues are brought into the open and demystified, employees will feel they have a better grasp over the situation, which is the first step to putting a plan into action.
Financial education for employees is a great driver for engagement
Employee engagement is a tricky and complex area. It is influenced by a lot of factors. But what we do know is that for employees to care about an organisation, they need to know that the organisation cares about them and their futures. Nobody wants to work for a heartless, faceless business that is only concerned with the bottom line.
Your employees are people, with very real problems, all of which have an impact on their morale, performance and engagement with their work. By stepping up and providing tools and services that can help them and improve their lives, you are demonstrating your commitment to them and their wellbeing, which will encourage feelings of loyalty and dedication in turn.
Here at Close Brothers, we offer financial education services to organisations and employees at every stage of their career. To discover how you can improve financial education for employees in your business, request a callback today.