Guest blog by Mark Fiander, Strategy and Marketing Director at ADP UK

At the start of this National Payroll Week 2015, I attended an event hosted by CIPP at the houses of Parliament. HR and payroll representatives from across the country gathered to listen to Worcester MP, Robin Walker, discuss the importance of payroll to the UK economy.

Lindsay Melvin, CEO of the CIPP, also contributed to the discussion, asking the audience some questions to test financial awareness. While one would like to think that industry professionals would be pretty hot on answering general finance questions, I doubt anyone could confidently answer every single question.

This came as no surprise to me. From my previous experience at the Money Advice Service, I am well aware of the lack of financial awareness that exists around the globe and particularly here in the UK. Research has shown that one in six people cannot understand a bank statement, and 4 in 10 would have to think about how to pay an unexpected £300 bill .

The cost for employees

These issues are even more pronounced among young people. Money Advice Service research highlighted people ordering pizza using a payday loan on the way home from an evening out or buying a £600 jacket on a credit card, donating it to a charity shop a few weeks later and assuming this meant they no longer had to pay for the purchase.
Poor financial skills and knowledge, negative attitudes towards saving and planning ahead combined with complex financial products and services frequently leads individuals into a downward spiral of unpaid bills and increasing debt.

The costs for employers

People in debt are twice as likely to suffer from mental health issues. This not only effects absenteeism and presenteeism levels among staff, but too reduces productivity among workers and increases costs for organisations . Looking back through the years, financial education was often delivered in the workplace through seminars. However such educational tools are no longer as common due to the costs involved and the challenge of finding times that work for all employees.

This lack of workplace education is a real shame, especially since employers are credible sources for their employees – a third of staff seek financial advice about pensions and retirement from their employers . If trusted for one of the most complex areas of finance, why not seek to address other areas of financial education that can benefit both employer and employee?

How can employers enhance financial awareness?

It is interesting to dwell on how financial education can be delivered in the workplace. With technology comes the potential to deliver financial training through e-channels that are engaging and well aligned with the needs of both employer and employee. High quality content already exists; it’s just a case of getting it in front of people in a cost effective and timely fashion.

As Human Capital Management experts, at ADP we are not only interested in the operational elements of running payroll and other HR tasks, but in the people that make businesses run. A workforce that is financially aware, can balance their own books and make sensible decisions is more likely to be happy, financially secure and – as a result – productive at work.

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