Providing financial education in the workplace is clearly a matter of good citizenship, but it also makes good business sense. Financial competence reduces the risk of getting into money problems and is conducive to greater productivity by reducing stress levels. Providing financial education is also perceived as a benefit by staff, and can therefore help with employee retention.
Research by the University of Warwick, Happiness and productivity, published in February 2014, showed that happy employees are 12% more productive than the ‘average’ member of staff. This link between happy staff and successful businesses with growing shareholder value was supported by Employee satisfaction and firm value: A global perspective, published by the London Business School in July 2014.
Another good reason to offer financial education to staff is that it is likely to be good for morale in the workplace, by enhancing employee engagement. This arises when there is a two-way commitment between both employer and employee to support what matters to one another. Helping employees understand their personal finances offers significant benefits at a modest cost to the employer.
Delivering education face-to-face has the benefit of direct interaction with the audience; it also provides the ability to match the contents of tuition to the specific needs of those attending. However, this is a costly method, and can only scrape the surface when it comes to reaching the numbers that need it. There is also a shortage of available people across the country who can deliver effective personal finance tuition.
Online financial education, incorporating activities, quizzes and feedback, is therefore an effective, engaging and cost-efficient way of reaching larger numbers.
Martin Upton is senior lecturer in finance, and director of the Centre for the Public Understanding of Finance, at The Open University Business School
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