By Arthur Kendall, managing director of FinanCity
With debt hitting the trillion pound mark and more credit cards than people in the UK, it’s not surprising that many are struggling with their finances; between the furore over the pensions’ crisis and people not saving enough for their retirement, we have become a society of financial ostriches hoping that our troubles will just go away.
A recent report shows that not for the first time –as many as one in five adults feel they lack understanding of financial products. Worrying about money and not knowing where to turn for advice, means that finance related stress is rife, an issue that is commonly cited as the number one cause of absence from work. It can also be a major factor in job dissatisfaction, which in turn, affects productivity.
Ultimately productivity has a direct impact on an organisation’s bottom line, so it is in employers interest to minimise employee stress levels and the negative impact it can have.
Benefits packages have become an integral part of HR strategy, with HR professionals striving to improve the quality of life for employees and in turn improve productivity and job satisfaction levels.
It would stand to reason therefore that if lifestyle issues including personal finance, are causing stress and affecting productivity, employers should approach benefits from an holistic perspective. Improving quality of home life and working life for employees.
The principle of looking after staff is at the heart of what is known as Corporate Social Responsibility (CSR), something that has become more prominent on company agendas over the last few years as businesses strive to bring attention to their ethical outlooks.
CSR is not just about wider community issues, however, replanting trees, or building playgrounds for example. It must also address issues that are pertinent to the immediate community of the workplace – employees.
Many organisations lost ground and credibility over the pensions’ crisis. The collapse of many pension schemes has left employees in the dark as to how to plan their long-term savings.
Businesses can help by offering integrated benefits packages that also address CSR strategies. Providing personal finance support is a good example.
Employers can now not only be wage providers but can also help employees become informed about what to do with their money.
Education is key and can be easily implemented; it can take the form of workshops on subjects including pensions and debt. This could be made available online.
Employers need to show that they will support their employees and help them to achieve their goals be they life, financial or career oriented, all of which, of course are inextricably linked.
Recent indicators show that we may end up following in the footsteps of the Australians by introducing compulsion with regard to pension saving, but the most important thing is that employers keep their staff well informed on what this will mean for them.
Helping an employee to learn skills of good financial management is akin to monitoring illness, life coaching and career planning all of which should be regarded as an holistic approach to employee welfare. None of these approaches stand alone and should work in conjunction with each other.
There is no point in helping staff to plan their career if they are not educated in other respects too. Why invest time and effort in helping them develop their skills and job experience, if they cannot effectively manage their finances to achieve these related goals?
Employers should recognise that there is a tremendous opportunity to help bridge the pension and savings gap by providing their employees with sound financial education.
In this way corporate and personal goals can be better aligned, leading to a more productive and happy workforce, whatever the job or company.