How to educate the workforce on the importance of financial wellness
In a recent article by Andrew Hood from the Institute of Fiscal Studies (IFS) and published by the BBC the writer posted seven reasons it helps to have rich parents. These included (amongst others) the observation that income growth has stalled and that the wealth of young adults has halved since the 1970s.
So our money isn’t going as far and the younger you are, the less wealthy you feel compared to those that preceded you…in stark terms it is pretty bleak. The old adage of ‘the baby boomers pulled up the ladder behind them’ could actually be extended; those born in the 1970’s have had it far better than those following them too.
As well differences in wealth and progression (perceived or otherwise), we have seen a number of recent changes to benefits which could affect our day-to-day living, including Working Tax Credits, Salary Sacrifice (although its impact will be minimal) and the continuing roll out of the Universal Credit. Furthermore, changes to the pensions Annual Allowance may affect younger employees further down the line when they may look to increase what they can pay into their pension.
But regardless of where you are in life, it is a good idea for employees to take control – and in a complex and ever-changing world, understanding our own financial wellness is more important than ever. This may not have been a traditional stomping ground for employers, but that doesn’t mean that the demand would not be there; our recent research found that financial education was something that employees actually hoped to gain from their employer, with 76% stating at least one benefit they would hope to get from it.
So what can employers do get help get employees engaged and thinking more about their overall financial wellbeing and education?
1) Make it personal and relevant
The first thing to say is that you can take them to water, but getting them to drink has to be in their interest, so make it relevant to the individual and personal enough so that they know why they are interested.
2) Enable individuals to assess and compare
Everyone needs context – how am I doing relative to what I want, but also – is that better or worse than others in a similar situation? Giving individuals tools, games, to assess how they are doing has never been more important.
3) Ensure it’s simple and self-explanatory
There is no point in presenting technical information that requires a tax lawyer to explain the detail – keep it simple – if it isn’t simple, it probably doesn’t apply to most of your audience so remember the relevance.
4) Make it actionable
Education for education’s sake never works – think back to learning trigonometry in maths at school – without something to do with that knowledge it risks going in one ear and out of the other. However, make it practical, relevant and enable an individual to do something, quickly, and you’ll get lasting results.
5) Continue to monitor
If you are going to assess, compare, make it simple, personal and relevant and have individuals taking action – then monitor it, for them and you – how are we doing? Are things getting better? Everyone likes to receive confirmation that their actions are making a difference.
My last point is a little more about business than individuals – the problem with financial wellbeing at work is that while employees want education, employers need a reason to provide it. This is not something that can be delivered and left to its own devices, there has to be a return on investment for the company.
So set out your financial wellness and education strategy as part of your wider wellbeing approach – and work out the reasons why you are doing it. As an employer, is it because you are benevolent and morally you feel you need to support employees, or is it because of the impact that less financially stressed employees will have to the bottom line? Start with your business problem and put anything you build into that context.
Alex Tullett is head of benefits strategy at Capita Employee Benefits.
This article was provided by Capita Employee Benefits.
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