Your employees’ financial fitness can have an impact on the productivity of your business. This is because low financial capability and poor financial wellbeing can cause stress and mental illness that lead to a loss of concentration at work and even serious health issues. As it is Financial Capability Week, we wanted to discuss this in the context of the workplace and what you can do to help your employees.
What is Financial Capability Week?
Financial Capability Week is an annual event that celebrates, showcases and amplifies the work underway to improve financial capability and ultimately to improve financial fitness and wellbeing. The week is organised as part of the Financial Capability Strategy for the UK.
Financial fitness and capability in the UK
Although it has become easier to manage money with the introduction of smart phones, online banking and wearable tech., the number of people struggling to keep up financially has risen sharply1. And in fact even though people have readier access to their information than ever before, they are not necessarily interested. A recent survey by the Money Advice Service found that 41% of adults do not know what their current account balance is within £502.
There are several reasons why financial capability could have decreased. It could be the ease of spending with debit or credit cards, the ease of access to that credit and the bad habits that have formed because of this. Many people clearly know if they spend too much or can’t afford some of the items they buy. But some also find it hard to keep track of their spending and can struggle, especially at the end of the month, turning to credit or personal loans to buffer their finances.
Improving financial capability
What’s needed to counteract the lack of financial capability is not just education but a change in behaviour, which can be very difficult to achieve. Individuals may want to make a change but may not have the opportunity to seek advice outside of work and will not know what is appropriate
It’s in your interests as an employer to make sure your employees are well and focused at work. Workplace education is just one of the ways you can provide support for your employees. It can be useful, but only if it provides tools and skills rather than just information. It’s important that your employees not only understand key financial areas, but also understand how they apply to their personal circumstances and how they can be better with their money. A key factor is also the culture of your workplace, as this can have an effect on wellbeing too. Look out for our blog post next month on how workplace culture can affect financial wellbeing.
Our financial capability initiative
We have provided financial education workshops for our colleagues to help them understand and be better with their finances. We ran workshops for younger employees at the beginning of their careers, workshops for employees in the mid-stage of their careers and even for individuals on our apprentice programme.
The feedback we received from our colleagues has been excellent and very well-received: 69% of attendees gained what they wanted from the courses and over a quarter (27%) said they wanted even more support. Most importantly, a huge 60% said that they would make a change to their behaviour to manage their money in a more effective way.
You may think that your employees’ financial capability is none of your business, but ensuring they are healthy and well is. By providing them with the necessary support to manage their money better you can help them to be healthier, happier and more productive at work, saving your business money.
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- Money Advice Service: Financial Capability of the UK
- Money Advice Service: Barriers and Building Blocks