Three quarters of employees believe that money worries impact their working lives, according to a recent study.
The report also showed that more than a quarter were unhappy with their finances. The most common concerns were funding retirement, paying off debt and coping with a reduction in household income.
Financial security is important
Jeanette Makings, head of financial education at Close Brothers, says: “Worrying about money not only affects people at home, it also affects their productivity at work and is one of the biggest causes of stress and anxiety.”
There are a number of simple steps people can take to improve their financial wellbeing says Makings, “Review your budget and outgoings and shop around to reduce regular costs,” she advises.
Employers also have an obligation to educate their employees on financial matters, according to Makings, “Doing so will improve employees’ financial wellbeing, reduce their level of stress in the workplace, and fundamentally improve performance and retention. It’s a win-win,” she notes.
What can employers do to help staff with financial education?
Communicate the benefits
Rebecca Aldridge, managing director at Neon Financial Planning, says communication is key. “Employees should be made aware of what benefits they have as part of their package, and how to maximise them,” she comments.
Offer a discount
“Employers could consider offering a discount to staff who want to seek personal advice in the same way they offer other employee benefits like life insurance or gym membership,” Aldridge says. “This can even be done via salary sacrifice arrangement so it’s more tax efficient for both the employer and employee.”
Use financial education as a recruitment tool
“Imagine telling someone at the interview stage that part of the package is a financial wellbeing program to ensure they feel happy and secure whilst working there. Who could argue with that?” says Aldridge. “Happy staff are also more productive, and less likely to leave – which means increased business output and less time and money spent on recruiting and training staff.”
Run lunch and learn seminars
“Lunch and learn seminars at the workplace are always popular and stimulate people to come up with a strategy for financial wellbeing,” says Jeff Lestz, CEO of Genistar financial services firm. “Offering your employees a one-on-one meeting with a financial consultant will encourage them to plan for the future. It’s easy to do and shows you truly care about your people.”
Set up a payroll drop-in clinic
“Payroll teams are well positioned to help employees to understand their pay and taxes – an area that is often overlooked in favour of saving into a pension or debt management,” says Laura Hughes, head of marketing at PayDashboard. “Payroll drop-in clinics for employees can be helpful in helping them to understand their pay and other finances.”
Think about timing
“The key is providing the right information at the right time,” says Hughes. “Our guidance about pay and taxes is provided with the employee’s payslip, when an employee is viewing their payslip then money is on their mind, and they are more likely to engage with content that involves their pay.” If, for example, you are implementing a pay rise, it would be a good time to talk to employees about their pension contributions.
Think about the bigger picture
If anyone in your business is still a little reluctant to provide financial education, encourage them to look at the bigger picture, says Aldridge. “The case for employers to provide a service to make employees feel in control of their finances should speak volumes; better employee retention, improved productivity and a harmonised working environment,” she notes.
Although financial security is one of the biggest causes of worry for employees, there are plenty of things you can do as an employer to alleviate this worry. From better communication about employee benefits to “lunch and learn” training seminars. Keeping the lines of communication open between you and your employees will not only enable them to feel more comfortable, but will also help to boost their productivity.
For more employer tips:
- How to write a reference for an employee
- 8 key ingredients for a positive business culture
- Why digital skills are important for you and your work force
Georgina Fuller is an award winning freelance journalist and editor.