Less than half of employers provide financial education
Businesses aren't doing enough around financial education in the workplace, meaning they could be missing out on opportunities to improve productivity, wellbeing and staff retention
Less than half of employers (44%) offer programmes to help their employees make informed financial choices and boost their overall financial wellbeing, according to research from Zellis.
Its survey, of 2,000 British workers across major industries such as retail, manufacturing and financial services, indicated a clear need for more financial education in the workplace.
It found that the majority of workers (58%) don’t fully understand their payslips and only a quarter (24%) look at their statement every month.
Many workers also struggle to access important information about their employment package, with two-fifths (40%) claiming they don’t know the total value of their benefits and rewards, despite ranking it as the second most important factor (26%) after base salary (61%) when looking for a job.
Additionally, nearly a third (32%) of employees said they aren’t given enough information about the benefits available to them, while a quarter (25%) said the same about their pension options.
This lack of guidance is preventing employees from making choices that truly meet their financial needs, researchers said.
They also found greater access to financial education would help improve employee engagement and wellbeing. Almost two-thirds of employees (63%) said they would feel more looked after, 33% said they would be more loyal to their employer, and 31% said they would feel less stressed about money issues if they had access to financial education of some sort.
The majority (88%) of 18- to 34-year-olds said such initiatives would have a positive impact on their personal situation, compared to just 69% of those aged 35 and over. This comes as several previous studies have highlighted that Millennials and Gen Z workers feel the most vulnerable in their financial situation.
For businesses already struggling with productivity, financial stress leads to lower engagement and concentration and higher absenteeism among employees, researchers warned.
Gethin Nadin, director of employee wellbeing at Benefex (part of the Zellis group), said employers need to step up to better support employees with their financial wellbeing.
"The UK has some of the lowest rates of financial literacy in Europe. Add to this the effects of austerity, stagnated wage growth, increased borrowing and employees are really struggling. With little support available elsewhere, all eyes are turning to the employer to assist," he said.
"This research confirms that a wellbeing strategy which focuses on improving knowledge of financial products and employee benefits is much needed.”
Speaking to HR magazine, Nadin emphasised the psychological impact of poor financial education: "Money is extremely emotive and worrying about it can be all-encompassing. When money worries cause stress, employees get distracted at work and tend to sleep poorly. This can lead to taking time off work and a reduction in productivity."
He added that many financial wellbeing initiatives are too general.
"Most wellbeing initiatives at work fail and this happens with financial wellbeing too. This generally happens because they are too broad and not personalised to the needs and specific timing requirements of employees," he said.
"A financial wellbeing strategy needs to be personalised to all kinds of employees through whatever life stage they are at and beyond. Most employers simply buy products or services off the shelf and expect them to work independently. Employers need to focus on a strategy that includes multiple financial wellbeing ideas at once and ensure that this strategy evolves regularly. "
There must also be an awareness of how some groups can be particularly affected, he said: "They also need to be sure the specific challenges of different groups of employees are catered for.
"For example, BAME and female employees are statistically less likely to get financial education at work. I rarely see a workplace financial wellbeing designed for these employees."