Making a Case for Increasing Workplace Financial Literacy
When employees are healthy, happy, and energized, a workplace thrives. But when they’re stressed and anxious, the company’s wellbeing suffers. Given the facts that money worries are a leading cause of anxiety and that the financial world is becoming increasingly complex, it’s no wonder many companies are exploring the possibilities of promoting workplace financial literacy through sponsoring a top-notch financial wellness program.
In general terms, fundamental financial literacy can be measured by having capability to handle one’s finances on a daily basis, meet the demands of an unexpected expense, and set money aside for future needs. According to the Consumer Financial Protection Bureau, there are three factors that go into a person’s financial wellbeing: financial skill, financial behavior, and financial situation.
The current workforce faces financial worries on an escalating scale. Because many people are short on money management skills, they encounter the many financial pitfalls that exist in today’s economy. Three-quarters of Americans do not have budgets and most of them live paycheck-to-paycheck, with little or no savings upon which to fall back. What’s been called the “spend economy” encourages people to buy, buy, buy, wearing away at their motivation to secure their own futures. And the resulting money problems spill over into their work lives.
Lack of workplace financial literacy has direct impact on an employer’s balance sheet. Employees facing money stress are less productive, take more time off, and perform at subpar. Their physical and mental health suffers, which leads to increased costs for employers to provide health care insurance benefits. A good employer has a duty and responsibility to help address these issues.
Workplace financial literacy programs will require an investment of company resources and time, so support and buy-in from organizational leadership is important. Although there are many ways for an employer to provide financial education, there are some methods that have been tried, tested, and shown to work. For starters, it’s key to identify the point from which your employees are starting in regards to financial wellness capability – so undertaking a survey, interview, or pilot test to determine that baseline is the best initial action.
Tailoring a program of financial education courses that work best for your employees will depend on the company’s unique profile. But there is evidence that certain elements have had positive outcomes across the board. These features include content and resources that meet the highest educational standards; real-world applicability of lessons; highly-qualified, certified instructors; participant recognition; and continuing education at follow-up.