The rising cost of living and stagnant wages are creating unprecedented financial stress for workers.
So what role should employers, and HR departments in particular, play to help staff manage their own money?
During the past 12 months, 30 companies in Australia (including banks, utilities, unis, lawyers and investment firms) and non-profits have rolled out programs to promote 'financial resilience' for their staff.
These companies are part of the Financial Inclusion Action Plan (FIAP) program. The FIAP efforts include education sessions for young workers (who are more inclined to spend than save), financial workshops for people with disabilities, and toolkits to help women manage their budget post relationship breakup.
One company that’s part of the FIAP program is Flight Centre, which has a high proportion of young employees who have been spending more than they earn.
Flight Centre business leader Stacey Beckley told HRD that a trend towards online shopping and the prevalence of credit cards has contributed to a generation of workers with scant personal finance skills.
“Our mantra is to help staff to understand what they have got to work with because unfortunately most people are not very good with managing money,” said Beckley.
“We have been working in the space of financial inclusion for the last 23 years when our founder, owner and current managing director set up a small division in Flight Centre to look after his staff’s finances."
According to Beckley, the aim of the plan is to help their employees better manage their money, control their spending and make sure that they are clear on what their financial goals are and how to get there.
“It’s about trying to give them those skills to assess what the current situation looks like for them and how to better make use of the funds you have got coming in,” she said.
“A lot of what we do is about preventing bad spending behaviour, as opposed to dealing with the symptoms.
“So we get countless emails from people thanking us to help them get out of a situation that they are in. To help them get out of hot water and to structure a plan on how to consolidate their debts and pay them back.
“Most people want to save to go on a holiday or buy a house, or conversely get out of debt so we monitor our people’s financial goals on a monthly basis."