Employers unsure how to provide financial education to employees
Employers have a part to play in financial wellbeing and education but are generally unsure of what steps to take to deliver this.
That’s the conclusion from a new survey conducted by Punter Southall with over 300 HR magazine readers.
The Punter Southall 2020 survey looked at the impact of COVID-19 on business priorities and employee benefits.
It found flexible working, pensions and Employee Assistance Programmes (EAPs) were the three most important company benefits.
But companies employing more than 200 people made pensions their top answer for this section, demonstrating the large role financial wellbeing has for both employers and employees.
Just less than half (49%) of employers do not offer financial education, support or wellbeing to employees.
This could be leading to a culture of distrust when it comes to financial matters.
Fifty-two per cent of employees don’t feel comfortable asking their line manager for help if they have money worries.
Coronavirus has played a part in shifting business priorities, with 86% arguing the pandemic had increased the importance of and need for better understanding and support for financial wellbeing in the workplace.
Respondents were most worried about health, job security, debt and wellbeing as the top four areas in the wake of COVID-19.
There was some disagreement who was most impacted by poor financial wellbeing.
Thirty-five per cent of respondents said financial wellbeing impacts all ages evenly, with 32% arguing 18 to 30 year-olds suffered most and 30% arguing it was employees aged 31 to 50.
Flexible working, pensions and help with financial decision-making in the form of an employee assistance programme were the top three most important company benefits in the survey.
Speaking to HR magazine, Alan Morahan, MD of employee benefits consulting at Punter Southall Aspire, said: “Our research, carried out in conjunction with HR magazine, supports numerous statistics from other sources that demonstrate that financial stress in the UK is a growing problem, which can negatively impact the workplace in numerous ways.
“HR professionals are very aware of this, and it’s clear from our research that many would like to start tackling this, with 86% agreeing that the COVID-19 pandemic has increased the need for better understanding and support for financial wellbeing in the workplace. Their difficulty is knowing what to do about this and having a budget to deal with it.”
While employers agree that financial education will help their people and organisations, most employers said it was the personal responsibility of staff first and foremost to deal with.
Just 1% of respondents felt it was important for them as an employer to fill in the gap for their staff to access financial wellbeing and 83% didn’t see it as a business priority.
Under one in three (29%) said they had a firm idea of the resources to help their staff access financial wellbeing, but the majority either didn’t feel it was their responsibility or had little idea of where to start.
Of those businesses that do offer guidance to employees, this generally took place in the form of EAPs. But support also came in the form of workshops, free access to financial advice, sessions on pensions and more.
The majority of employers (61%) did not offer pre-retirement guidance to employees approaching the age when they can access their pension pots.
Morahan recommended employers could be doing more at relatively little cost.
He added: “Employers could signpost free advice services such as The Money and Pension Service, which is a rich source of. financial information. They could also ensure that line managers and HR staff are trained to better understand the causes and consequences of financial difficulties, and how they can support staff members struggling with their mental health and/or finances.”
He also recommended employers should avoid leaving colleagues out of pocket by paying for work expenses up front and investigate what support might be freely available from the providers and insurers of existing employee benefits.