Marks and Spencer was spurred into launching a financial education programme after some of its staff were hit by the collapse of the Farepak savings scheme.
The demise of Christmas savings club Farepak was a catalyst for Marks and Spencer (M&S) to launch its financial education programme in 2007.
Farepak ceased trading in October 2006, leaving tens of thousands of savers out of pocket. Its parent company, EHR, went into administration the same day, and both businesses went into liquidation in October 2007.
Alan Daniels, manager of employee share schemes at M&S, says: “We had a number of individuals who were using that scheme. It was the catalyst that started to ring some alarm bells. Why were our employees using those schemes when they could save with schemes offered by Marks and Spencer that would have more protection and give them more value? Given that M&S already offered a sharesave scheme and other benefits, we wanted to ensure that individuals fully understood their benefits package and what they could do with it.”
Feedback from the M&S employee representative committee, Business Involvement Group (BIG), confirmed that staff did not fully understand their workplace savings options.
Consequently, M&S appointed Wealth at Work to help develop an all-employee financial education programme, catering for executive directors down to newly employed graduates.
The programme is based on two tiers. The first offers general financial education through seminars covering early and mid-career financial awareness, planning for retirement and helping staff make the most of their money.
The second tier offers more targeted seminars covering tax and pension changes, share vesting and redundancy, and includes webcasts and one-to-one consultations.
In line with the company’s belief that financial health is integral to an employee’s overall wellbeing, it also offers staff a full range of financial guidance through the M&S Wellbeing website, which employees can access at work and at home.
The site contains information on savings and investment, debt management and tax efficiency, including webcasts, fact sheets and downloadable podcasts, all designed to help staff manage their finances better. Independent financial education website FinanceExplained.tv, together with podcasts on early share vesting and changes to share plans, are also promoted to employees.
M&S’s financial education programme proved useful when communicating the company’s three- and five-year sharesave schemes ahead of their maturity on 1 January 2012.
M&S communicated the options available for both schemes through a series of lunch-and- learn sessions provided by Wealth at Work.
It also used maturity packs, emails, individual letters and, in some cases, personal phone calls.
M&S’s three-year sharesave scheme saw 12,000 staff share a pot of £60 million, but its five-year scheme was underwater, which means the option price was higher than the market value of the shares at the time.
Two further sharesave schemes matured in January 2013: a three year plan, which was above water, with an option price of £2.92 while M&S’s share price was around £3.60, and an underwater five-year scheme.
“We were keen to ensure employees made the correct choices,” says Daniels. “We included examples of what it could mean for staff if they took the cash or sold the shares. For instance, ‘if you do one, you will get X and if you do the other, you will get Y’. It illustrated the difference in cash terms.
“It was to try to bring it alive and give them all the information they needed to make an informed decision. So far, all eligible employees have decided to exercise their options, which means they have gained, and the feedback so far has been very positive.”
M&S’s communications on financial matters include email invitations and posts on the intranet, in-store poster campaigns and team briefings, benefits fact sheets and booklets, as well as using the BIG to filter down information.
Future developments to its financial education programme will include integrating new technology and media to reach employees whatever their location. “It is about trying to use technology smarter to reach a diverse workforce,” says Daniels.
CAREER HISTORY: ALAN DANIELS
Alan Daniels has been manager of employee share schemes at Marks and Spencer (M&S) for two years.
His role also covers financial education and senior remuneration.
Daniels has held a variety of roles at M&S since 1984, including the position of reward analyst for 10 years and a generalist HR role.
“My proudest moments with M&S include the launches of the sharesave schemes, where I have been able to apply some of the lessons learned from the financial education programme, and the introduction of total reward statements,” he says.
Away from share schemes, Daniels’ main interests are his family and his frequent holidays in Spain.
MARKS AND SPENCER AT A GLANCE
Marks and Spencer (M&S) is one of the UK’s largest retailers, employing more than 65,700 people in the UK. A total of 3,000 employees are based in five head office locations, with the rest spread across 500 stores.
The majority (77%) of the organisation’s employees are female and 71% work on a part-time basis.
Of its total workforce, most are customer assistants who do not have access to computers or the internet during their working day.