November 30, 2020

Are companies doing enough to support their employees financially?

A recent study found that 35% of those aged between 35 – 44 year have relied on their parents over the last year for financial help, a figure that rises to 59% of 25-34 year old’s and 61% of 21 – 24 year olds.

The study, conducted by Guarantor Loan Comparison and featuring respondents from 147 educational institutions and UK companies, announced the results of the 18–44 year old’s Financial Insights Survey.

The findings raise the question whether companies are doing enough to engage with their employees on where pressure points are with living costs and whether there could be something that employers could do more to help. 

When asking respondents between the age of 35 – 44 which areas they felt the most financial support from parents was needed, 47% answered ‘Buying a house or help with the mortgage’. This was followed by ‘Debt’ from 27%, and third highest was ‘Savings’ answered 20% of the respondents in the age bracket.

The role of a company HR team in supporting an employee could be extended to include aspects of life outside of work, such as education for debt reduction, saving options, or a flexible benefits package for each employee to focus on easing each persons unique financial requirements.

Benefits to a revised HR process could have a direct impact in reducing potential stress, improving the employee’s wellbeing, and ultimately boosting happiness and productivity.

While the Financial Insights survey found that those up to the age of 45 would still look to their parents for financial help, the group that required the most financial help from parents (61%) were those aged between 21 – 24 years. While reliance on parental support for students is somewhat expected, the study revealed the extent to which 61% of those just entering the workforce after graduation required financial help  –

  • Nearly 2 out of 5 admitted that they couldn’t afford their current lifestyle without parent support
  • 35% get food shopping paid for by their parents
  • One out of three young respondents live at home rent free for financial support
  • 17% of 21-24 year olds have help paying their monthly rent
  • 13% have had help with a house deposit 

Daniel Tannenbaum, Founder of Guarantor Loan Comparison, states:

“Our study into the financial reliance of individuals on parents reveals how crucial financial planning is. With the costs of student loans rising it’s those leaving university education who seem to be most reliant on their parents, often well into their twenties.  

Parents are clearly happy to offer support with the major life costs associated with leaving university. The majority either allow their children to live at home for as long as required, or help them with a house deposit. And looking into the data, it seems this reliance doesn’t stop even as children reach their 30s and beyond, with 35% of those up to the age of 44 getting help in the past year.”

The graduate age group poses other questions for HR teams; how does a company support the financial needs of a recent graduate, particularly in an area of high living costs, looking to gain experience in an industry?

A young workforce can have sweeping benefits for a company who is willing to provide the training and invest in adequate living costs to those that need to relocate. This type of investment and foresight has been found to benefit companies in the long run.