Employers are responsible for managing many aspects of their employees’ daily operations, but does financial management fit into those boundaries?
Standard Life, a leading British financial servicing company, released a study focusing on how nurturing the relationship should be between employers and their employees. The study shows that all involved feel that employers should offer better guidance by playing a more active role in setting up employees’ financial futures.
I would tend to agree, especially with regard to any business situated in the financial sector. However, a neglected and possibly even more important result of this study is how a potential employee’s financial situation may impact his attractiveness as a candidate.
The aim of the study was simple: “To define how employers can best support employees achieve long term financial responsibility.” But in order to do so there needs to be a comprehensive level of financial transparency between the two parties, which can lead to brand new issues.
Not surprisingly, in today’s economic environment employees desire to remain at their hiring company for an extended period of time. Employers understand this, which means they will actively create the best environment for a long-term professional relationship.
In this case, the extent of the responsibility an employer takes in financial planning for their employees is crucial. Benefits like these will help companies recruit the best talent and retain workers.
The study, conducted in part with an occupational therapist, led Standard Life to introduce Lifelens. This platform will provide access for employees to all of their benefits and savings in one place, allowing for complete transparency and improved understanding.
Simultaneously, employers can see exactly how their workforce engages with the benefits, which will help close the gap in the workplace. The study claims to pinpoint the changing dynamic of this relationship and predict how it will continue evolving in the future.
On the flipside…
The study showed that employers definitely feel a sense of responsibility over their employees’ financial future. Employees seem to feel the same way. But that can have dangerous repercussions.
With this proposed partnership and new level of transparency, employees want to be nudged in the direction of long-term personal financial responsibility.
Since when did your personal money decisions impact your chances of working for a company? While it seems many employees would enjoy more tailored financial engagement from employers, this can quickly isolate someone who doesn’t fit well with the team.
But is that a good thing?
I support empowering and guiding employees to responsible financial management, but if a company places more emphasis on financial management it can start cutting out certain employees based on their financial situation.
The aforementioned proposed level of transparency works both ways. Employees will want their employers to cater a financial program to the workforce, but the latter will need access to the financial health of the office. This will directly determine how such a program can be implemented.
This means that after such a system is in effect for a certain amount of time, a prospective employee may very well need to fit into a certain financial mold because of the financial management imposed on the office.
A tragic situation will find someone looking for work trapped in limbo: he will try to get hired to improve his financial situation, but finds out he is not financially fit enough to work with the company. Employees would be looking for individuals in better financial situations with responsible goals that fit with the office.
Neither I nor Standard Life suggest that this will soon become a widespread problem, but it highlights an evolving issue in the workplace: