Want and need: how to inspire employees when it comes to financial education
Have a feel-good moment. Think about something you’re really good at. How did you become good at it?
Now, think about something that you don’t do well. Why is that the case?
If your answer to the first of these was along the lines of: “I wanted to learn it” or “I had to learn it”; and in the second instance: “I wasn’t interested” or “I just couldn’t see the point”, then you are in good company.
Education specialist Phil Race has analysed over 200,000 adults’ learning experiences over the course of 20 years, and his resulting seven-stage ‘ripple effect’ model is widely used in adult education. Right at the centre of his concentric circles (where the metaphorical stone hits the water) are ‘want’ and ‘need’ - the motivation or interest required to make learning happen and neatly summarised as “I wanted to”, or its nemesis “What’s the point?”.
The ripples in Race’s model extend out through ‘doing’ (practice, repetition and experience) and ‘feedback’ (other people’s reactions). These drive ‘making sense’ (understanding what has been learned). At the extremity of the circles lie ‘verbalising’ (being able to explain to others what you’ve learned), and ‘assessing’ (making informed judgments based on that learning).
What, you might ask, does this have to do with employee benefits? When it comes to financial wellbeing, the answer is ‘plenty’. According to research carried out by Close Brothers and the CIPD in January, 58% of employees face barriers to managing their finances, including understanding products and services. And 30% make financial decisions without advice or information from any source.
Understanding the choices
Helping adults better understand the choices available to them, feel more in control of their day-to-day finances and apply that knowledge to help them plan for their futures is becoming increasingly important. The introduction of the Lifetime ISA could be just the start of offering wider savings choices in the workplace. Employees over the age of 55 now have more options than ever before, but could be making irreversible decisions with very little knowledge to guide them.
In our recent Business Barometer survey, 63% of respondents said that they thought financial education at work is essential for all employees. But applying the principles of Race’s model in the workplace requires some in-depth thinking. ‘Want’ and ‘need’ are difficult to create - the first is driven by enthusiasm and a desire to learn (not always something associated with our finances); and the second with necessity. That can mean overcoming the temptation to put financial learning off until another day, or to simply bury our heads in the sand.
The difference between 'want' and 'need'
There are two points in an individual’s career where employers are best able to harness ‘want’ or ‘need’ - at the beginning and the end. An enthusiastic joiner, straight from education or another job, is more likely to want to engage with looking after their finances. Those approaching retirement will start to feel the need to understand the choices available to them.
‘Want’ and ‘need’ may also put in an appearance around the time of life events, such as the birth of a child. This can provide the crucial nudge from ‘I ought to better manage my finances’ to ‘I really need to understand my finances’. Making sure that the learning opportunities are there when that impetus occurs, or helping to drive it through appropriate communications, is a great starting point.
Assuming you’ve got employees primed and ready to learn, how can employers support effective learning and work towards the outer ripples of Race’s model? You’ll have to wait for the next instalment to find out.
This article was provided by Close Brothers.
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