As an employer, you have a duty of care towards your employees, and are responsible for protecting their health, safety, and well-being – in and outside the workplace. And, since personal finance is a dominating aspect of everyone’s life, business owners should do their best to help their team members achieve and maintain financial wellness.
Introducing a financial literacy program can be a simple but effective solution to boost workplace culture, keep at bay employee stress, reduce absenteeism, and boost business acumen and productivity.
Here’s all you need to know.
Financial Literacy: What It Is and Why It Is Needed More Than Ever
As reported by GFLEC’s 2022 Personal Finance (P-Fin) Index, on average, Americans are only able to answer about 50% of the P-Fin Index questions about basic finance concepts.
But, even more importantly, the survey highlights the relationship between poor financial literacy and improper credit card use, unfavorable spending habits, lack of emergency funds, and limited retirement savings.
What’s more, according to PwC’s Employee Financial Wellness Survey, nearly 70% of employees only ask for financial guidance when in debt or on the verge of making a significant investment, while 0% take advantage of ongoing support from a financial advisor.
At a glance, these statistics offer an overview of the state of financial literacy – a knowledge gap that can significantly impact every aspect of an employee’s life, including on-the-job performance, health, and attitude.
On the other hand, it has never been easier or more affordable for employees to introduce financial literacy programs and provide employees with money management tools. For example, SoFi offers a personal finance app that is highly accessible and easy to use, while online courses are available for employees to complete at their own pace.
Here are just some of the benefits of this choice.
Reduced Financial Stress and Increased Productivity
Currently, over 60% of the population lives paycheck to paycheck, and 72% of adults report dealing with severe financial stress regularly. That is why, when introducing a financial literacy program, you won’t just help your employees get out of debt, but you will also provide them with efficient tools to fight stress and regain control over their physical and financial health.
For employers, this translates into reduced healthcare costs, improved productivity, fewer sick days, and increased team morale. There’s no doubt that this is a win-win situation!
Enhanced Engagement, Retention and Job Satisfaction
As the “Great Reshuffle” rages on, it isn’t surprising that an estimated 40% of employees actively look for another job while in employment. On the other hand, for businesses, it has never been more important to find ways to boost retention rate and engagement.
Introducing a financial wellness program is a great way to help your employees find increased job satisfaction and salary satisfaction, while also creating a better company culture for new hires.
Reduced Absenteeism, Crime and Cash Advancement Requests
Introducing a financial education program in the workplace can help your business build a distinctive culture, which can drive loyalty and engagement, thus reducing the risk of employee theft, absenteeism, and other abusive behaviors.
Even if you have built a loyal team, don’t underestimate the impact that financial stress and desperation might have even on the most honest of your employees.
If you suspect that employees are struggling to make ends meet, have started stealing from the company or clients, or consistently submit cash advancement requests, make sure to provide them with the tools needed to rebuild financial stability.
Greater Business Acumen and Better Decisions
As seen above, on average, employees have a limited understanding of financial principles and money management. But what if these same employees are also the supervisors, managers, and key players in your company?
According to a survey by IFEBP, over 60% of employees can become financially savvy through a financial education program. In turn, this translates into better financial decisions for the business, a greater understanding of their role, and an improved capacity to plan and set goals.
Improved Life-Work Balance
Financially healthy employees aren’t just more productive while in the workplace, but they are also more active and satisfied in other aspects of their life.
Indeed, when they no longer need to find ways to increase their income and can leave their side hustle behind, they can start to focus on continuing their education, cultivating passions and hobbies, and building a better work-life balance.
Pic Source: Pexels
HR Future Staff Writer