European business leaders must play a greater role in providing young people with a grasp of core financial competencies, says a major new report from youth entrepreneurship advocates Joint Achievement Europe (JA Europe).
As The Treasurer reported in March, the organisation undertook a wide-ranging poll of Europe’s bosses over the spring to find out which financial skills they thought were most urgently needed to prepare young people for the workforce.
The report highlights financial planning and budgeting as the most crucial skills for long-term success that younger Europeans tend to lack – whether as budding entrepreneurs, or prospective employees at established firms.
Other key areas where there are currently shortfalls include:
“Young people are vulnerable in this age of virtual money and financial complexity,” the report points out. “Clarity on the right mix of skills, how they are taught and who is involved is important to improve programmes at school, strengthen partnerships and help young people make better and more informed decisions.”
With that in mind, JA Europe chief Caroline Jenner argued: “Business leaders should be more involved in financial education. It is not only an essential skill that makes young people more attractive to employers – it’s also important to teach them how to take financial decisions that will improve their lives.”
She added: “This survey clearly shows that [leaders] can’t just rely on schools to deliver financial education; they have to step in and build more effective partnerships with educators.”
JA Europe notes that, in the private sector, 63% of respondents who are already involved in financial education are also engaged in employee volunteering, which they consider a win-win opportunity.
Leaders also think that their national education systems must update their curricula to more accurately reflect emerging needs. But the report indicated that, while bosses are keen to be more involved in financial education, time constraints on their side and a lack of motivation at some schools to collaborate are hindering progress.
“Given the fact that educational reforms take time,” said JA Europe, “this report aims to urge business to get involved. Europe cannot afford to wait and let young graduates miss out on opportunities, just because of a lack of motivation from both the education and business sector.”
In a foreword to the report, European Banking Federation CEO Wim Mijs writes that JA Europe has reminded the region of a “brutal” need to improve financial education, presenting firms with a “daunting” long-term challenge.
“Financial choices that our younger generations need to make are far more challenging than those faced by past generations,” he argues. “What’s more, they will live longer, making it even harder for pension systems to deliver on their ambitions.”
He adds: “For a sound financial future, financial planning is required at a much earlier stage in their lives. Financial literacy really is an essential life skill for the 21st century, crucial to living and thriving in the modern economy.
“Financial education can help boost this literacy. In the end, it is the same as with driving lessons: if you do not do it properly, then accidents will happen.”