Two-fifths (40%) of employer respondents provide financial education to their workforce because it is viewed as a valued employee benefit, according to research by financial planning and investment organisation Close Brothers Asset Management.
Its Close Brothers business barometer report, which surveyed 900 UK employers, also found that 37% have implemented financial education in order to improve employees’ financial wellbeing and 33% have financial education in place because it is part of their people strategy. A quarter (25%) of employers use financial education provision to improve employee engagement, compared to 22% that utilise financial education to ensure employees understand and make use of the organisation’s available employee benefits.
More than a fifth (21%) of respondents provide financial education to boost employee productivity and 17% do so to support engagement with the organisation’s pension scheme. This compares to 14% of employers that use financial education provision to help represent their culture and brand values.
Jeanette Makings (pictured), head of financial education at Close Brothers, said: “It’s clear that employees are not saving enough, nor are they saving in the most effective way. This is true for both short and longer-term financial planning, including pensions. Employers are perfectly placed to help their workforce become more confident and competent in financial decision making, in turn having a direct impact on their financial, physical and emotional wellbeing.”
The most popular method to deliver financial education is individual face-to-face meetings (37%), although employers also utilise group face-to-face conferences and workshops (35%) and web-based seminars (25%). Other digital delivery methods include email education (26%) and online platforms (23%), however a minority use the post (9%) and text messaging (4%) to execute financial education.
More than one in 10 (17%) of respondents believe that poor financial management by their staff has no impact on their business, although a further 34% have recognised that employees with insufficient savings suffer from higher stress levels; 25% have noted an increase in employee health issues due to money worries and 14% have seen higher absenteeism for the same reason.
Just under half (47%) of employers do not currently offer financial education to staff, nor do they plan to do so. Of the businesses that do provide financial education, 14% describe their service as ‘limited’.
Makings added: “Those who receive financial education find it useful in guiding their immediate, medium and long-term savings decisions. This then frees up employees at work to be happier, healthier and more productive. As such, having a comprehensive financial education strategy is a win-win for employers. It could even go some way towards solving the UK’s productivity puzzle.”