Financially stressed employees spend 20 hours a month of work time trying to solve their financial problems, and experts are warning that amid the almost universal economic concerns, it may be time to expand your suite of employee perks to include financial literacy training.
According to a study, more than eight in 10 organisations offer no financial education to help employees. What’s more, the CIPD/Benefex Reward Management Survey 2012 found that while more than a third of companies plan to increase their spend on employee benefits this year, just 18% invest in communicating the full value of their total remuneration package. “If employers apply [a] duty of care to their entire reward strategy, by improving employee understanding and awareness around the value of the entire breadth of benefits they offer, employers are likely to reap the benefits in terms of recruitment, retention, engagement and productivity,” Charles Cotton, from the UK-based Chartered Institute of Personnel and Development (CIPD) said.
It is therefore beginning to be seen as paramount to regularly communicate the full range of rewards and benefits available over and above basic pay and holiday entitlement, and to provide financial literacy training as a standard benefit.
According to financial literacy training firm Future Map, there are three key elements to successfully deliver an effective financial education in the workplace – the programs must be:
- fun and personally engaging
- have an educational focus on the broader financial principles and behavioural concepts so that the new knowledge and habits instilled during the program continue to have positive and lasting impact on employees’ ongoing financial decision-making.
In an employer-provided training program, employees should be armed with tools and knowledge and become part of discussions around credit card debt, what they will need to retire, what insurance they have and need and the difference between managing investments inside and outside of super, Alisdair Barr from Future Map said. “I don’t see financial education programs as extracurricular activity; I see it as a core skill, like management and communication, that has an impact on entire lives and careers,” Barr added.
Key considerations when engaging a financial education provider:
- Independence – the majority of workplace financial literacy offerings have a product or service being sold in the back end. It’s important to ensure you are offering an independent financial literacy program where the sole driver of the program is to deliver independent and accessible information, for education purposes only.
- Passion – financial literacy is generally considered ‘boring’ and financial conversations can fly under many people’s radars. Ensure the facilitators you choose are passionate and energetic and the program is built and presented in a simple engaging manner.
- Barr also noted that financial education can only go so far and at some point, people will want and need professional advice.