Why financial education offers the greatest opportunity for engagement, loyalty and wellbeing
Over half (54%) of 6,000 employees we surveyed for our report, The Changing Landscape in Managing Talent, expect their company pension scheme to be one of the two top sources of their future retirement income. Nearly the same number (50%), however, don’t expect to have, or don’t know if they will have, enough money to live on in retirement and this is the primary financial concern for retirement (52%).
Many respondents are worried about their financial situation and recognise that they do not save or invest as much as they should to obtain a secure financial future. While lack of disposable income is the primary reason for most (67%), there are nearly one fifth (19%) who are simply uncertain about what to do.
Despite this uncertainty only 29% are likely to seek professional advice and many (42%) rely on media for their main source of information.
Given the intertwined financial nature of their relationship with employers, surprisingly only 1.8% would consider turning to their firm for financial advice. This is likely due to a lack of availability of advice in the workplace (real or perceived) but it presents employers with an opportunity to add real meaning to ‘employee engagement’, by truly focusing upon the requirements of the end user; the employee. Even more so, given that 48% of employees think employers could do more to support their financial decisions on savings and investments.
Impact on the bottom line
Financial stress has been shown to have an impact on an employee’s effectiveness at work which in turn will have an impact on the bottom line of an organisation.
That in itself is reason enough to consider the benefits of a financial education programme within the context of an employee engagement strategy, whilst recognising that there is a direct link between that and well-being.
Improving financial capability and well-being among employees increases general health scores with the linkage between employee stress, worry, and in some cases time off sick from work. Improving financial capability is considered critical on the journey to better financial well-being.
Often though, employers fail to understand what financial well-being of employees actually involves. Employees are looking for adequate financial resources, along with capability as well as a capacity to make informed decisions in order to attain and maintain financial security for themselves and their families.
And that is before you factor in the increasing desire for, and expectation of, employers’ duty of care in the context of corporate responsibility, given employees’ likely dependence on the firm for current and future income.
Financial education is something which can bring meaningful benefits.
This article was supplied by Equinti.
In partnership with Equiniti
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