In today's fast-paced and ever-evolving economic landscape, financial security and literacy are more crucial than ever. And with five generations of employees in the workforce today – all with unique outlooks on financial wellness – the cookie cutter financial advice of yesteryear won’t cut it anymore.
Employers have a unique opportunity to foster an empowering workplace environment through offering financial education as an employee benefit. So let’s walk through reasons why integrating financial education into your employee benefits package is an investment worth making.
The importance of financial education for employees
Times are tough, and lacking financial education can lead to poor outcomes for employees. A good financial education backing can help people make informed decisions about their money, such as the best strategies for retirement planning, the right mortgage options, and drafting a sustainable budget for their family. Financial education can come in so many forms, including employee access to budgeting apps and financial advice and coaching, and more.
Unfortunately, a gap in financial knowledge means many lack this crucial control over their finances, leaving them exposed to potential risks and unprepared for emergencies, leading to financial distress, such as overwhelming debt, damaged credit, and the loss of assets.
Simply put, by equipping your employees with financial education, you're not just giving them knowledge; you're providing them with a safety net for unforeseen circumstances.
1. Boosts employee financial wellness
According to a survey by the Mental Health Foundation, 34% of UK adults feel anxious about their financial circumstances. So it’s no surprise that poor financial circumstances can then influence their mental health and productivity at work.
Comprehensive financial education can equip your employees with the necessary tools and knowledge to manage their finances effectively. This includes understanding how to budget, save, invest, and plan for retirement. Empowering employees with these skills leads to better financial decisions, increased savings, and less stress, contributing to a healthier, more focused team.
2. Increases Employee Engagement and Retention
Offering financial education demonstrates a company's commitment to its employees' overall well-being and future. This commitment can significantly enhance employee engagement and loyalty. After all, employees are more likely to stay with a company that invests in their growth and well-being beyond the office walls.
Plus, employees who can manage their money more effectively are more likely to be satisfied with their salary, making it less likely that they’ll seek other job opportunities on that basis.
So by providing these valuable resources, you're not just investing in their financial health; you're showing that you value them, which can boost morale and reduce turnover rates.
3. Attracts Top Talent
In a competitive job market, the benefits package offered can be a deciding factor for many potential employees. Financial education as a benefit can set your company apart from others. It signals to prospective employees that your organisation supports not only professional growth but also personal development, giving your company a leg up in the market.
4. Supports Diversity and Inclusion
Financial education is beneficial across all demographics, but it can be particularly impactful for groups who might not have had the same access to financial learning resources.
And it starts young; a study by the FFT Education Datalab reports that kids from disadvantaged socioeconomic backgrounds are far less likely to be taught skills like savings money and discerning “wants” from “needs” when it comes to their budget–skills which follow them into adulthood.
Offering financial education is a step toward levelling the playing field and promoting inclusivity within your organisation.
Final thoughts
Offering financial education as part of your employee benefits package is a wise choice that can pay dividends in terms of employee well-being and company success. It's an affordable, inclusive, and effective benefit that can help your employees achieve financial stability and your company achieve its broader goals. Invest in your employees’ financial health, and watch as it transforms not just their lives but also the productivity and effectiveness of your organisation.
Want to learn what financial education benefits you can implement to make your company stand out?