Over half of employees face financial struggles
- Published on Thursday, 02 August 2012 11:03
- Written by Vicki Mitchem
Three quarters (73%) of employees report that their organisation offers them no form of financial support or advice to help them better understand and manage their finances.
That's according to newly released data from the Chartered Institute of Personnel and Development (CIPD)'s Summer 2012 Employee Outlook focus, based on a survey of more than 2,000 employees. The data highlights that, despite the rising pressure on employee living standards, with 59% of employees reporting some financial struggles, employers are missing a trick by failing to offer even basic financial education.
To help employers provide more work-based financial education programmes for their employees, the CIPD has today launched a guide on workplace financial education. The guide calls on employers to offer financial education at work, to combat the danger of stress and anxiety-related underperformance associated with employee debt. With stress identified as the number one cause of long-term sickness absence*, there is a real incentive for employers to tackle financial related stress in the workplace.
The guide also highlights the risks surrounding a financially ill-educated workforce. It can mean that the resources organisations invest in their reward packages end up being wasted as employees do not appreciate the value of what is on offer to them.
Introducing the guide, Charles Cotton, Reward Adviser at CIPD, said: "Employers may think that the financial savvyness of their employees is not their responsibility. But the impact of not providing financial education can mean a workforce pre-occupied or overwhelmed by their own financial worries, and unable to appreciate the value of their organisation's pay, benefits and pensions package.
"A little financial education can go a long way. It can improve performance by giving employees the means to alleviate stress and pressure they're under because of financial difficulties. It can help boost motivation and staff retention by helping employers to get across the value of the financial benefits they offer to their employees. And, by heightening general financial awareness, it can create a workforce that better appreciates the business pressures faced by their employers."
Among those workers who said that they were offered advice or support, the most common offerings were employee assistance programmes (13%); access to an independent financial adviser (7%); workshops on financial self-management (4%); online financial guidance (3%); access to a credit union (3%); and access to hardship loans (2%).
Further findings from the summer 2012 Employee Outlook focus:
- 53% of employees reported that they are concerned about their financial plans for retirement, with one in five (20%) of private sector workers admitting to having no financial plans for retirement.
- 39% of workers report concerns about just about making ends meet (rising to 43% for women) and 38% are concerned about having enough money for day-to-day spending, with a further 27% concerned that they are not saving enough.
- 59% of employees report that they would be able to survive for less than six months if they were to lose their main source of income, with a quarter (23%) able to survive for less than a month before running into serious difficulties.
- 39% of those in employment report that concerns about how they are going to be able to pay for their summer holiday reduces their enjoyment of it and a further 24% reporting that, when they return to work, worries about how they are going to be able to pay for their summer vacation causes them stress.