Three quarters (73%) of employees report that their organisation offers them no form of financial support or advice to help them better understand and manage their finances. That’s according to newly released data from the Chartered Institute of Personnel and Development (CIPD)’s Summer 2012 Employee Outlook focus, based on a survey of more than 2,000 employees. The data highlights that, despite the rising pressure on employee living standards, with 59% of employees reporting some financial struggles, employers are missing a trick by failing to offer even basic financial education.
To help employers provide more work-based financial education programmes for their employees, the CIPD has today launched a guide on workplace financial education. The guide calls on employers to offer financial education at work, to combat the danger of stress and anxiety-related underperformance associated with employee debt. With stress identified as the number one cause of long-term sickness absence*, there is a real incentive for employers to tackle financial related stress in the workplace.
The guide also highlights the risks surrounding a financially ill-educated workforce. It can mean that the resources organisations invest in their reward packages end up being wasted as employees do not appreciate the value of what is on offer to them.
Introducing the guide, Charles Cotton, Reward Adviser at CIPD, said: “Employers may think that the financial savvyness of their employees is not their responsibility. But the impact of not providing financial education can mean a workforce pre-occupied or overwhelmed by their own financial worries, and unable to appreciate the value of their organisation’s pay, benefits and pensions package.
“A little financial education can go a long way. It can improve performance by giving employees the means to alleviate stress and pressure they’re under because of financial difficulties. It can help boost motivation and staff retention by helping employers to get across the value of the financial benefits they offer to their employees. And, by heightening general financial awareness, it can create a workforce that better appreciates the business pressures faced by their employers.”
Among those workers who said that they were offered advice or support, the most common offerings were employee assistance programmes (13%); access to an independent financial adviser (7%); workshops on financial self-management (4%); online financial guidance (3%); access to a credit union (3%); and access to hardship loans (2%).
Further findings from the summer 2012 Employee Outlook focus:
*CIPD/Simplyhealth Absence Management survey 2011