Most organizations invest heavily in training their employees with the skills required to be effective and successful in their roles. However, in today’s modern workplace, equipping employees with the know-how they need to make informed decisions regarding various aspects of their financial lives is often neglected.
This encompasses both work-related benefits such as understanding how to maximize employer contributions into their 401(k)s or choosing the right investment options when it comes to their pension plans as well as learning how to manage their personal finances in more efficient and effective ways.
With almost 50% of the adult population in the U.S. lacking financial literacy, this is a pressing issue that needs to be addressed. By providing employees with the tools they need to better understand this important area of their lives, and become better custodians of their money, employers can help unlock benefits that will serve their employees as well as their organizations. In this article, we will discuss the benefits of fostering financial literacy in the workplace and practical ways employers can introduce these initiatives to their staff.
Image by Scott Graham on Unsplash
Alleviates Stress
Stress is known to be a major contributor to poor work performance, low morale and high absenteeism. In many cases, this stress can be financially related according to PwC’s 2023 Employee Financial Wellness Survey which reports that one in three full-time employees say that money worries have negatively impacted their productivity at work.
The survey found that financial stress also affected other areas of employees’ lives such as their sleep, mental health, self-esteem, and physical health. By offering financial literacy within the workplace, employers can help to alleviate this stress and support the overall health and well-being of their employees.
Improves Focus and Productivity
The PwC survey also found that financially stressed employees were more distracted at work with 56% spending three or more hours per week dealing with or thinking about issues relating to their personal finances, while at work. This can significantly erode productivity within the workplace and cost businesses through greater absenteeism, higher turnover rates, less innovation and growth and ultimately, lower profits.
A workplace that equips its staff with the tools and knowledge to better manage their personal finances can help boost productivity. This may include training on budgeting, saving, debt management and planning for future financial needs, empowering employees to make better financial decisions that allow them to maintain their focus while at work.
Improves Credit
Financial stress can often be due to the struggle to manage debt and make loan, mortgage, or credit card payments on time. Teaching employees how to manage debt better and make smarter credit decisions can help them improve their credit scores, which can ultimately help them create a more positive financial future.
This may also include training on how tradeline companies work and how they can help employees improve their credit scores. As a result, they can secure more favorable loan terms and lower interest rates, which can help enhance their overall financial stability and performance at work. You can visit this site to find information on the best tradeline companies.
Financial Literacy Program
Organizations can unlock these benefits within the workplace by putting in place financial literacy programs that offer their employees valuable insights to help them make informed decisions regarding their finances. This can be achieved in the following ways:
- Tailored offerings: By identifying the areas that can best serve their employees, organizations can offer tailored content to meet their financial needs. For instance, larger corporations may offer workshops or webinars on retirement planning and investment strategies, explaining financial terms and jargon in easy-to-understand ways. Meanwhile, smaller organizations may focus on topics like debt management and budgeting to support the unique challenges of their workforce.
- Personal financial advice: Money matters often require a personalized approach, especially as everyone’s situation is different. By offering their staff access to one-to-one financial counseling, they can discuss their unique needs and concerns with a financial advisor who can help them better understand and explore their options.
- Leverage mobile tools: Financial literacy can be improved through the use of mobile tools such as games and smartphone apps that educate employees about financial matters in engaging and relevant ways. Gamification and app-based learning can help convey complex concepts in an enjoyable and accessible way, as well as offer employees digital tools to make budgeting, tracking expenses, and investing easier and more practical.
- Offer ongoing support: By reviewing the evolving financial needs of their employees, employers can continue to offer them financial literacy support that is most relevant and effective for them. Programs can be adjusted and enhanced based on employee feedback through surveys and polls, ensuring that the support meets their needs and maximizes its impact on their financial well-being.
By providing employees with the resources they need to improve their financial knowledge and skills, organizations can improve the well-being of their most valuable asset and foster a workplace where everyone is supported to thrive.