Going the extra mile for your staff
Businesses that financially educate their staff gain a competitive advantage by better retaining talent, advises Louise Hadland
Should my business provide ongoing pensions or financial education to employees? This
is a question asked by many management teams in large organisations across virtually all sectors.
Knowing how best to save
for a pension and educating oneself more generally about the best financial strategies is not a straight forward task. It is
to that end that some people automatically assume it must
be the role of the employer
to educate their employees. Large organisations are full of professional people in HR or finance who can demystify this complex area of information into bite-sized chunks.
However, looking at the statistics, clearly more work needs to be done around who should be responsible for educating employees. Researchers ‘Secondsight’
found that two-thirds of workers receive no financial education from their employers. Of those employees, only one-fifth had a financial plan for the future and one-third claimed they had a vague idea about financial management yet half of employers surveyed said their staff had asked for help with financial education.
Good business sense?
Some businesses will see financial planning as a private matter in which the individual is solely responsible. To a certain extent many might understand why some businesses could feel this way given that employees have not only professional but personal lives. However, this view is predicated on the notion that those particular lines are never blurred.
In an era of constant communication through smart phones and social media, clients demanding more for less, and businesses being forced to innovate to retain and increase market share, the reality is that many professionals, such as lawyers, are having to work longer hours. If an employee has a personal problem, this can fast become a professional one and time and again, money worries have been proven to be one of the top issues ‘keeping people up at night’.
Financial issues can affect overall performance at work as stress levels become elevated which in turn can then cause productivity issues resulting in
a negative effect to the bottom line of a business. It might therefore be seen as good business sense to mitigate or alleviate some of the pressure employees face by providing them with some form of financial/pensions education.
Firms should also recognise that benefits have never been
so important for retention and motivation of staff and financial education, when communicated correctly, can be seen as a valuable benefit.
The right approach
It is no secret that bringing qualified professionals into your business to advise employees through financial management – from pensions, to saving for
a child’s university fees – can, ironically, prove very costly to
Many HRs feel that there
are already other things
which business does to assist government so may see this
as another burden on business. With the roll-out of auto-enrolment workplace pensions by 2018, all employers will have responsibility to offer access
to pension schemes. Changes
to pension access include individual financial advice;
one could argue this is a little
late in the day.
With the state pension age being raised and other new measures coming in to force there is likely to be an increased expectation to provide guidance on these changes much earlier
in people’s careers. It is likely
to prove both beneficial to and appreciated by staff, if employers can at least point an employee
in the right direction for information. It would take little to provide this directional support.
Although some may see the benefits of educating staff, businesses should remain cautious about providing too much information as only qualified financial advisers can give such advice. It is for this reason that many blue-chip organisations signpost staff to web sites with the information, such as YouGov.In all, businesses can benefit from going the extra mile for their staff even if it is just by pointing them in the right direction. In the modern day stressful office, such education can go some way to improving wellbeing and can be seen as an added benefit in a competitive market.