How to Justify Financial Literacy Training for Employees
What is the top issue causing stress among members of the workforce today? Money, according to the American Psychological Association. And how does employee stress affect the workplace? It leads to myriad problems, from low productivity to higher healthcare costs. A financial wellness program for employees may offer a solution to this problem.
Improving employees’ financial capabilities has become more easily justifiable in recent years, given the money issues workers face. On this page we discuss the problems associated with lack of financial skills in the workplace, the benefits of improving employee financial literacy, and some best practices identified for optimum programming.
Illustrating the Problems of Financial Illiteracy at Work
It’s no secret that stressed-out employees are less engaged with their work and therefore less productive. Today’s economy poses challenges for the workforce, most of whom live paycheck to paycheck – fewer than 25% of Americans have budgets in place. Pressures from advertising and peers encourage people to spend before saving. And money-related problems detract from our ability to make good decisions about retirement planning and contributions.
The employer suffers alongside employees in this regard. When workers are stressed and unhealthy, they call in sick more frequently, are less engaged and productive, and perform less well. The costs for an employer to provide healthcare insurance are increasing at an alarming pace. The answer to addressing these problems may be found in employee financial education and training.
Benefits of Improving Employee Financial Literacy
On the flip side, financial literacy training for employees helps relieve stress on employees facing money issues. Once they’ve dealt with the problems, they are less likely to take time off, come to work more enthused, become more productive, and report being more satisfied with their jobs. They view their employer as having genuine interest in their well-being. Plus, financially savvy employees are more likely to take best advantage of the retirement and health insurance options their companies offer.
The employer shares equally in these benefits. More productive and engaged employees stay with the company longer and feel more loyal. The costs to provide health insurance go down when employees exhibit better health, according to employee financial wellness providers. Morale soars and the company culture becomes more collegial and cooperative. And the return on investment has been calculated at a quite favorable rate.
Optimal Methods of Financial Literacy Training for Employees
When an employer sets out to offer financial literacy training for employees, the first step should be to assess their baseline knowledge levels. This evaluation can be done with interviews, surveys, or asking employees to respond to a short financial plan. From there, some companies approach the selection by “testing and learning” which program and delivery mix represent the best options for their staff.
Several program aspects have been identified as best practices for employee financial literacy training, which should be as comprehensive as possible. Peer-to-peer and gamification/contest features have proven to be helpful and engaging for many workers. Online delivery makes it easier for employees to learn what they most need to know and at their own pace. Employers should choose a personal finance seminar program with the highest quality of curriculum, one that offers learning that participants can truly apply in their real lives. Continuing education after the program concludes helps build top-of-mind awareness about financial knowledge among employees.