Organisations are going to increasing lengths to support their employees’ physical and mental fitness. But what of financial health – should employers be taking greater responsibility here too?
With recent figures showing that about eight million people in the UK have no savings at all, while fewer than half of employees have any idea of how to manage their net pay, it’s no surprise that stress has reportedly become one of the principal causes of long-term absence.
In light of recent changes to pension access rules, it makes sense for employers to provide financial education for staff to enable them to manage their money better. By investing in financial education, organisations can boost employee retention and productivity, while reducing stress-related absence. The benefits of this approach could be applied to both employers and employees. The development of an in-house programme would demonstrate compassion and understanding towards staff finances. Increased self-esteem and motivation would translate into a more productive, focused workforce.
Providing financial education about the wide range of options available can be viewed as an employee benefit, while saving as a strategy gives people financial control, which in turn helps to relieve stress. It is vital, though, that organisations and their in-house financial teams recognise their limits and do not cross the line into providing unregulated financial advice
Chris Wood is CEO of Develop Training
It’s easy to suggest that, in comparison with individuals, employers are better at investing, raising money and dealing with banks. But is this really true? Not all companies have rigorous procurement policies and many pay significant costs for their funding. Some go bankrupt, so would hardly make ideal financial advisers anyway. The underlying issue, though, is that employers directly advising employees on how to deal with their finances would not only cross an important line, but also undermine the foundations of personal choice.
The roles of employer and employee are ingrained in mutual duties of care and contracts of employment. And how an individual chooses to borrow, spend or invest money – or not – lies outside that relationship. The responsibility for personal finances needs to stay just that: personal. Employers could nevertheless facilitate the provision of help. I return to my first point, which recognises the breadth of employers’ experiences, rather than the outcome of their actions. There seems little reason why they should not beneficially signpost details of supportive institutions, programmes or other external sources of guidance for employees, particularly those experiencing financial hardship. This may be helpful while remaining unintrusive.
Should employers be proactive in supporting staff with their financial wellbeing?
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