Should companies fund financial education for staff?
Feeling a sense of financial wellness may seem extremely distant for many Australians, in fact a recent study from ANZ uncovered that only 40% of Australians feel that they’re “doing okay” when it comes to their finances. With financial stress now placed as one of the leading causes of employee absenteeism and increasingly affecting overall wellbeing, what is the next step? Many progressive companies are now looking into how they can further benefit their employees at a low cost, encouraging financial wellness through the provision of company funded financial education services. In many industries, where sourcing skilled and loyal workers is becoming increasingly difficult, this may be the path to higher employee satisfaction and lower staff turnover.
With financial planning practises being excluded from our educational syllabuses and resources not being readily available, it’s no surprise that many people feel bewildered when it comes to managing their finances.
Individual financial advisory isn’t working. Reports from ASIC reflect that, of 73% of Australians who had never sought out financial advice, 41% intended on visiting a financial planner - yet hadn’t. The report stated that the biggest reasons people didn’t engage with a financial planner where because individuals;
Found financial advice too expensive
Didn’t understand whether financial planning was relevant to their circumstances
Had a lack of trust towards financial planners
Thought they didn’t have time
So, with such distrust in financial institutions, perhaps the answer is in empowering employees through education. Equipping individuals with the understanding and skillset to approach their own financial position with confidence is key. When putting together an employee benefits package, employers may tend to lean towards the traditional inclusions; paid leave, health and insurance packages, flexible working hours, superannuation benefits etc, however with companies now including financial education within these packages, they are actively setting themselves apart in a competitive market.
Through an annual employment wellness study, Ernst and Young discovered that 50% of their employees were worrying about their finances. With this in mind, and a goal to turn these statistics around, Ernst and Young put a financial wellness strategy into place - and it worked.
90% of respondents say that they have changed their spending habits and have accumulated more savings
80% of respondents have changed the way they invest, understanding the benefits of longer-term investments
There was a significant increase in employees retirement portfolios through educated changes to their risk profiles and how they were invested.
Enabling your employees to make healthy life and financial decisions through engaging, structured financial education is a proven way to increase employee wellness and satisfaction.