1. The case for workplace financial education Charles Cotton, CIPD Performance and Reward Adviser Central London Reward SIG 15 October 2012 © CIPD

2. The plan Talk about the business case from an employer perspective Hand over to Jeremy Mindell from Henderson Group © CIPD 2

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4. Outline Definition 1.Employee value and appreciation 2.Talent 3.Wellbeing 4.Communicating change 5.Business environment 6.Managing risk 7.Making the world better © CIPD 4

5. Definition OECD definition as the: ‘ process by which financial consumers/investors improve their understanding of financial products, concepts and risks, through information, instruction and/or objective advice, develop skills and confidence to become more aware of financial risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being’. © CIPD 5

6. 1. Employee perceptions and value © CIPD 6

7. Employer expenditure on reward is significant…. John Lewis Partnership, 2011 © CIPD 7

8. ..and set to rise through AE © CIPD 8

9. Employee appreciation © CIPD 9

10. Sophistication © CIPD 10

11. The power of communication: bonuses Net satisfaction scores Employees who got a bonus and reported that they were given an explanation +74 Employees who got bonus and reported that they were not given an explanation +21 © CIPD 11

12. The power of communication: pay increases Net satisfaction scores Employees who got a pay rise and reported that they were given an explanation +71 Employees who got a pay rise and reported that they were not given an explanation +33 © CIPD 12

13. The power of communication: freezes Net satisfaction scores Employees who got a pay freeze and reported that they were given an explanation -15 Employees who got a pay freeze and reported that they were not given an explanation -65 © CIPD 13

14. Employee understanding Impacting on: Appreciation Engagement lower employee turnover, lower absence high performance © CIPD 14

15. 2. Talent © CIPD 15

16. Current and future talent © CIPD 16

17. 3. Wellbeing © CIPD 17

18. 4. Communicating change Changes: Automatic enrolment, from October 2012 Real time information, from April 2013 Universal Credit, from October 2013 © CIPD 18

19. 5. Business environment help employees appreciate the economic environment and business contexts. © CIPD 19

20. 6. Managing risk tPR expects employers to take more responsibility for DC offer education and assistance to employees Employee insolvency Fraud © CIPD 20

21. 7. Making the world better OECD, poor financial literacy associated with: A lack of trust in financial institutions Mis-selling of complex products Undercoverage of risks High levels of indebtness Low levels of retirement saving Higher costs for disadvantaged groups © CIPD 21