Financial education is an invaluable tool to enable people to make sound decisions and become literate in all money matters, including budgeting, investing, borrowing and taxation.
A lack of financial education could impact mental health, lead to issues such as too little or no money for retirement and even, in extreme cases, bankruptcy.
A study by the Financial Conduct Authority (FCA) in 2020 found that 51% of adults show one or more traits of financial vulnerability from their lack of knowledge on the subject. The study suggests that problems in life such as poor mental health, financial anxieties or relationship breakdowns can result in a lack of fiscal resilience.
What this means for employers is that staff who are unhappy with their financial position may look to blame them rather than take steps to better improve their financial understanding and wellbeing.
Being fiscally literate brings with it multiple benefits that can improve the standard of living for individuals through increased financial stability. Below, we’ve detailed four key benefits employers can expect when providing workplace financial education.
1. Improved employee performance
Almost seven out of 10 UK employers believe that staff performance is negatively affected when they’re under financial strain. A study by AXA supports this, with 35% of employees admitting that anxiety around money is preventing them from performing their best at work.
It’s in a business’ interest to ensure that their people are comfortable with their fiscal position. Team leaders are in a unique position to be able to offer financial guidance to employees at significant life events such as when they start a family, move roles or retire, boosting workplace wellbeing and engagement.
2. Reduced stress among your team
Money continues to be the main cause of worry among the majority of the workforce. Figures released by CIPD this year show that a quarter of respondents to their Health and Wellbeing at Work survey believe poor financial wellbeing to be a significant cause of employee stress. This figure may be affecting your bottom line with The Centre for Mental Health finding that the overall cost to British employers of stress, anxiety and depression stands at £1,035 per employee per year.
Ensuring that employees have access to financial education could decrease anxiety both in the workplace and at home, as well as lessening the cost incurred due to fiscal stress.
3. Reduced workplace absence
Poor financial health can equate to up to 17% of payroll costs through absenteeism. It has also been estimated that a lack of financial wellbeing is costing the UK economy over £4billion each year.
Fiscally educating your staff can lower workplace stress which in turn can reduce not only absenteeism but also ‘presenteeism’; the act of showing up for work when unwell and as a result having a reduced level of productivity. ‘Presenteeism’ is a phenomenon not only related to physical illnesses, but also mental health too.
4. Lower staff turnover
Employees who are concerned about money would look to change jobs more often than those who feel financially secure in their roles.
High turnover can become problematic when recruitment is costly, several weeks or months are lost trying to fill a position or when the skills needed are scarce. Employees with a healthy relationship with their finances are likely to be more engaged, more productive and have an increased sense of loyalty to the business.
Brunsdon Financial can support you in all areas of financial education. From live workshops based at your company to online courses, there are a range of options suitable for employers looking to take the next step in employee financial wellbeing.