Workplace financial education could improve employee mental wellbeing, drive financial inclusion and support social mobility
Financial wellbeing platform nudge Global released its 2021 global financial wellbeing report, Disrupting Money Habits: Why it’s time for organizations to break cycles of exclusion, exposing the opportunity — and need — for employers to better support employees to build financial acumen.
Just 8% of Irish employees learnt how to manage their money at school or through a course, below the average for the EMEA region (11%). Concerningly, a quarter of respondents also said that “no one” taught them how to understand and manage their money. Many in Ireland are ill-prepared to make financial decisions or deal confidently with financial shocks. This is starkly apparent in the wake of the COVID-19 crisis when 42% of Irish people feel anxious about their financial situation and one in four (27%) feel ashamed.
What’s more, employees may be put off seeking professional help. Over half (57%) have felt excluded by the financial industry — and within certain groups, this proportion is even higher. Two-thirds of millennials have felt excluded compared to less than half (49%) of those aged 55 and older. Surprisingly, males in Ireland were more likely to have felt excluded from the financial industry (60%) than females (55%), which was the opposite of countries like the UK and the United States.
Existing financial systems are clearly failing to provide the varying levels and types of support required by diverse employees. As income providers, employers have the potential — and responsibility — to step up and fill the gaps. But right now, less than a third of Irish employees (29%) are offered personal finance education related to their personal circumstances and interests as an employee benefit, and 65% do not believe their employer is interested in helping them achieve their financial goals.
Men are slightly more likely than women (31% versus 21%) to have employers that communicate with them regularly about how to improve their personal finances, but overall across age, gender, and household income, the Irish are feeling overwhelmingly unsupported by their employers in financial wellbeing. This may be why six in ten (61%) believe that the deck is stacked against them and that people’s access to wealth is often unfair.
Jeremy Beament, Co-Founder and Director, nudge Global comments: “There’s a real opportunity for employers around the world to improve the financial knowledge of their workforce. In doing so, they will help resolve feelings of financial exclusion, support social mobility, and create a better employee experience that fosters improved wellbeing.”
There is also clearly an appetite amongst employees — and younger employees in particular — to improve their financial knowledge. Almost a third (31%) of 18-24 years olds turn to YouTube videos to educate themselves about personal finances, with 27% looking to TikTok. This trend can be seen across EMEA, although it is less pronounced with 27% looking to YouTube and 17% to TikTok.
To view the full report visit https://bit.ly/disruptingIRE.