- Recruitment A Listers
- Six Steps to Successful Flexible Working
- Stimulating Intellectual Curiosity
- 12 Dangers of Christmas
- Does Someone You Know Enjoy Being Miserable?
- Get Some Coffee Friends!
- Add Some Muscle to your Grievance Procedure
- CA Reject Morrison Vicarious Liability Appeal
- Managing With a Growth Mind Set
- Employee Accountability
- Bribery at Work
- What is the Reasonable Employer?
- Something to Celebrate?
- When Does Custom and Practice Affect Contract Terms?
- Take a (Short) Break
- When Leaders Are Tired
- Helping Employees Combat Loneliness
- Should Employers Provide Financial Education for Staff?
- Get it Noted
- Are You Feeling Perky?
- Developing Employee Responsibility
- Leaving it Too Late
- Are You Sourcing Top Talent For Your Business?
- Are You Allowing Your Top Performers to Compensate for Weaker Ones?
- Holiday Pay for Atypical Workers
- Responsibility for Employee Engagement
- Does The Appearance of The Sun Cause Your Staff to Disappear?
- What Do You Look For in Your Recruits?
- Helping Your Employees to Engage
- Reference Requests
Should Employers Provide Financial Education for Staff?
Do any of your employees continually carry debt on credit cards, depend on overdrafts or lines of credit to make ends meet, use one form of credit to pay for another, hide spending from a partner or use credit to pay for essential living costs? These are all early indicators that someone may be heading for financial difficulty.
Over the last few months I have found myself repeatedly advising clients to offer help to employees with some form of financial counselling or education.
Money problems can arise because of difficulties like unemployment, injury or illness, divorce, student loan debt or high housing costs. But there are also those who simply spend too much.
It seems that far too many 20-40 year olds (this is an approximate age group) are struggling to get to grips with the reality of managing within their income, even those who have very good incomes. They are spending far more than they earn, never mind putting money aside for a rainy day.
Recently I was talking to an employee who already earns a good salary. The company had won a big contract recently so she’d gone out and bought a new car on strength of that. No one had said she would be getting a pay increase, but she somehow assumed that would happen. Now she’s in financial difficulties (again). She already has heavy debt and has borrowed money from the company. She can’t afford the repayments on the car and has asked for a pay increase to pay for the car .......
This might sound bonkers to the point of financial insanity (well, it is) but it is incredibly common. Is it because we have been told “We’re worth it” by L’Oréal more times than is good for us or because we live in Amazon Prime world and don’t want to wait for and plan for anything? I don’t know. But financial illiteracy is not cute or healthy and as employers it’s sensible to try and help our staff, not least because if they are responsible for a departmental budget they have to have the skills to make it work properly.
Employees with money problems are more likely to steal if they’re in debt. Even if they don’t steal, they can become very depressed and anxious. Financial education and counselling can help fix such problems early.
Most employers do not have the resources and skills to provide financial education but there are freely available services to help provide support. The Money Advice Service, Citizens Advice and Age UK provide guidance and simple and easy to use online financial tools. Martin Lewis’ website (moneysaving expert.com) also has plenty of useful advice.
What can you do to help employee to be able to manage their finances responsibly.
- If your company has an EAP provider, ensure that they are able to assist clients with personal financial matters.
- Make details of debt counselling service known to employees.
- Know which reputable sources of assistance are available that you can refer employees. Make a referral list available centrally for everyone to access confidentially.
- Support an employee’s efforts to live within their means, on a budget and without credit.
Does your work place have ongoing fundraising campaigns, is eating out the norm, are your dress code expectations in line with salaries? Get creative with solutions to these situations, e.g. is your lunchroom a friendly place to eat?
Charles Dickens’ Mr Micawber’s advice given in Victorian England is still true today: "Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
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Although every effort has been made to ensure the accuracy of the information contained in this blog, nothing herein should be construed as giving advice and no responsibility will be taken for inaccuracies or errors.
Copyright © 2018 all rights reserved. You may copy or distribute this blog as long as this copyright notice and full information about contacting the author are attached. The author is Kate Russell of Russell HR Consulting Ltd.