Time to improve the financial literacy of your staff?

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The overwhelming majority of employers (96%) think that the new pensions flexibility creates a need for more financial education in the workplace, according to our recent survey of employee benefits. Typically only a small percentage of employees have been educated in financial matters in the past, and yet they are expected to be knowledgeable about their benefits. In my experience, companies assume their employees are able to make decisions around their benefits, but it is a big assumption and all decisions impact upon their general financial wellbeing. 

Employers will know in their own organisation how difficult it can be for someone to receive the message they are trying to convey, and often it takes several communications before it is absorbed. In practice, employees need regular help to ensure their financial plans are on track to understand what the changes mean to them.

What does financial education in the workplace look like?

The ideal financial education strategy should first begin by assessing the needs of the people in your company: it’s all very well providing them with education on the new pension options, but what if they think they don’t have enough money to save into a pension? There’s no point providing them with education about investments when what they need help with is learning to budget. Finding out what they need could take the form of questionnaires or surveys, and guided focus groups can also be very successful in gathering information.

From this point an employer can decide the most appropriate type of education to be provided and the content; the next step is to look for a provider. I have often been involved in ‘beauty parades’ where a number of providers are invited to present either a pilot course to staff or a proposal to HR – it’s ok to shop around! I also think that financial education should be the only ‘product’ on offer when it is delivered. Some providers use financial education as an excuse to get in and talk to an employer’s staff and then flog them every other product under the sun. If your employees feel they are being sold to, they are going to feel pressured and will naturally be less engaged, which defeats the object of what you are trying to achieve. I think it’s really important to choose a presenter that’s going to connect with staff because this can greatly improve levels of engagement. You can then match a provider with your particular needs and find one that suits the culture of your people and your business.

Designing the delivery plan comes next. You could start with a pilot course to assess how the course is received by your staff and then make further plans following this. Decide how long you’re going to allow your employees to be away from their desks and whether several shorter courses or fewer long courses is right for you. Then decide on the frequency of courses, and how often you want to provide education. 

I think it’s important to collect feedback from your education sessions, especially if you’re going to be providing a lot of them, so that you can see if any changes need to be made or if your staff want to focus on particular topics. This feedback is so important to make sure you are giving your staff what they want and education that can really help them. 

Financial education in the workplace is one way to help employees be happier, less stressed and make a difference to their future. It is easy to arrange, cost effective and has real impact on your employees and engagement scores. 

How do you convince your Financial Director?

So you’ve decided that financial education is a good idea for your employees, but it does cost money – so how do you convince the Financial Director (FD) that it’s worth it? I spoke to a Finance Director to find out what he would want to know when considering investing is such education, and have described below some of the points that will be essential for you to address when assuring your FD that this is a great idea.

I’ve already touched on why financial education is a good idea, but the FD will want to know how it’s financially beneficial to your business. If employees are distracted by financial worries they can become stressed or even ill, and this impacts upon the productivity of a company as a whole. Financial education can alleviate some of this stress, meaning a reduction in absenteeism that costs the business money. If you show your employees that they are valued and that you will support them, they are more likely to stay with the company and this means a reduction in attrition and therefore recruitment and training costs.

Even though providing financial education means employees take some time off from work (to attend the workshop) - the productivity lost is outweighed by the productivity gained - by happier more motivated employees. A fifth of employees say that worrying about their finances affects their work (according to the Barclays Financial Wellbeing Report 2014). If you can allay these money worries you can save your business money. If you choose a provider that can supply bespoke education that suits your company, the engagement with the education material will be increased and therefore more effective.

Introducing processes to monitor the financial education can also show you where you could save your business money. If you collect feedback and data from your employees, they can provide you with vital information about the things that are important to them, such as benefits and workplace strategies – you can see where your investment in benefits is and where it needs to be. Readjustment of your benefit spend means that you can put more investment into the benefits that your employees really value – making a great benefit that is regularly used, thus justifying your spending and making it worthwhile. You can also keep track of absences in the longer term and hopefully show a direct reduction due to your education and benefits strategy, and tangible evidence of cost savings.

And if the FD is still not convinced? Tell them the downside: you know that absences cost money, and you could just deal with the symptoms of stress with a healthcare plan, but it doesn’t tackle the real problem. The real issue is that many individuals need help to handle their finances, and if this is not addressed at source, more and more of them are likely to be absent from work due to stress and money worries. This costs you money - and could even cost you some of your talented and valuable staff.


 

Comments 

 
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# james 2017-03-07 00:28
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