Employers lack the confidence and knowledge required to support their staff with financial concerns, despite workplace absence brought about by a lack of financial wellbeing costing businesses 4.2 million worker days each year, research from Aegon has revealed.
According to the research, the 4.2 million worker days equate to a cost of about £626m each year for employers.
Aegon found that businesses are not confident in their ability to provide information to employees to alleviate financial worries and, with many people feeling the financial strain after Christmas, just 50 per cent of employers claimed they would be able to provide information to staff on debt issues.
When it comes to supporting employees with planning for retirement, just over a quarter (27%) of businesses said they would not be able to provide information on pensions and saving for retirement, with 38% unconfident they could answer staff questions on general savings.
Commenting, Aegon head of pensions Kate Smith said: “Our research is clear that poor financial wellbeing not only impacts individuals but is affecting businesses bottom line as well. Many people are living life on a financial cliff edge with debt and loans, coupled with the burden of financial obligations and commitments, impacting their ability to control their finances and respond to financial unpredictability.
“Our figures show the tangible impact of poor financial wellbeing on UK businesses with a staggering number of days taken off each year as workers struggle to deal with financial worries. It’s time that employers acknowledged the role that they play in supporting staff with their finances and there are some relatively simple steps they can take to increase financial wellbeing among their workforce.”
The figures from Aegon suggested that employers are “burying their heads in the sand” when it comes to the financial wellbeing of its staff, as over half (51%) of the businesses surveyed stated that they think the financial wellness of its employees is not personally their business. Just under half (45%) of employers expressed concerns that if their business reached out to staff to provide them with financial advice, they would feel like they were intruding on their lives.
Smith concluded: “As a first step, understanding the difference between the financial information they can easily offer and formal financial advice will enable employers to offer financial education, which can go a long way in supporting staff who may be struggling. More often than not, businesses will already offer a range of workplace benefits and simply communicating details of these can be a positive step in the right direction. This should include providing details of the company pension scheme in a clear and easy to understand way.”
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