How can employers help staff improve financial capability?

Business owners owe it to their employees and their companies to improve the financial capabilities of their staff. Studies show that happy employers are 13% more productive*.

Plus, you’re more likely to recruit and retain top talent when you have a workplace culture that values employees.  

Remuneration isn’t the only thing you need to consider when it comes to employee wellbeing. Still, it’s a very important cog in the machine.  If it’s not in place, the consequences for your company could be serious. 

How money worries affect employees

Financial stress* affects most of us at some point or another. Employers need to understand the causal relationship between their employees’ financial stress, and their own profitability. Fincap’s website* states that the effects of money worries result in a net loss of £120 bn to the UK economy.  

Research cited by Neyber identifies some of the reasons why a lack of financial capability can be a barrier to employee productivity and satisfaction:  

  • Almost 60% of employees feel that financial worries are keeping them from peak performance at work 
  • 46% of employees feel that money worries harm their relationships with their managers 
  • 25% of employees admit that money worries have caused them to lose sleep 
  • 67% of employees* want more financial wellbeing support from their employers 
  • Resultantly, poor financial wellbeing can cost employees up to 17% in equivalent salary costs 

Designing a system to improve financial capability 

Addressing the financial capability of your staff is about more than just giving everyone a pay rise. There’s evidence to suggest that a lack of financial capability doesn’t just affect low-income workers. Indeed, those commanding six-figure salaries experience the same severity of money worries as employees earning £10,000-£14,000 per year. 

In designing a system to improve the financial capability of your staff, you’ll need to be a bit more holistic in your thinking. Get to know their needs.

What are the most common frustrations your employees experience around money? Is there anything they feel you can help them do to improve cash flow and better manage their finances?  

Surveying your employees can ensure that your scheme is fit for purpose. 

Perform a cost analysis 

You’ll also need to ensure that whatever system you design to aid financial capability is economically viable. You’ll need to factor in:  

  • The cost of administrating the system 
  • The time and opportunity cost of employee participation (e.g. attending workshops or online learning) 
  • A cost-benefit analysis to identify how the system will improve employee and company finances

Decide on delivery 

How will you make sure your system is available to employees at all levels? Do you want to deliver your system in-house, or rely on external providers? Will it rely on online learning and resources, or will it involve peer-to-peer or group work? What goals will you set for your employees, and how will you support your team in achieving them? 

Ideas to improve employee financial capability 

If you’re not sure where to begin, there are lots of ways you can support your team in achieving financial capability. The key to success is integrating them into a broader system of employee support rather than treating them as one-offs.  

Here are a few practical ideas you might want to implement: 

  • Providing access to discounted products from partner providers (e.g. local gym or childcare facilities) 
  • Low-cost loans or pay advances to improve domestic cash flow 
  • Access to advice, one-on-one sessions or workshops from third party providers  
  • Facilitating remote or hybrid working to save on travel costs 
  • Providing payroll savings schemes in association with financial services 

If you would like to talk to a member of the team here at gpfm, please don’t hesitate to get in touch over email at enquiries@gpfm.co.uk or call 01992500261.  

This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions. Investments can go down as well as up and you may get back less than you invested. 

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About gpfm 

gpfm are an independent financial planning company dedicated to the provision of personal, professional, and objective-driven advice for our clients. We have been awarded the Chartered Financial Planners title by the Chartered Insurance Institute for offering high quality, independent and informed advice that meets the needs of our clients.