If you’re wondering why to invest in your employees’ financial literacy, consider that in every ten employees in America, six cannot spare any money for emergencies occurring between paychecks. Four out of these cannot settle unforeseen expenses amounting to $400.
Employees’ inability to deal with financial difficulties results in personal stress, lowering productivity. As absenteeism reduces, productivity increases, and the workforce is less stressed about wallowing in debts or being unable to cater to emergencies.
Introducing training sessions to combat workplace financial literacy benefits the employees and the entire organization.
We describe the key reasons why boosting financial literacy for employees is essential.
The Importance of Financial Literacy in the Workplace
1. Improved productivity and focus
Balancing your expenditure, savings, and investments from the salary or wages you receive from your job is essential in improving your productivity and focus. It takes away the worries of dealing with financial emergencies before your next paycheck, helping you divert your total focus on the tasks assigned to you. Ultimately, this improves business results and helps companies promote products or services more effectively.
As an employee, your mind frame is better and more directed to your job since you are confident that you can sort out planned and unplanned financial needs at any time.
2. Fewer cases of absenteeism
When employees manage their finances properly, they are more enthusiastic about coming to work on time and making more money. They are less stressed and healthier, with a more positive mindset.
In comparison, financially illiterate employees have a low drive and morale to work since their poor financial decisions make it seem like they are not earning enough. They find it unworthy to work with all the debts under their names, which sometimes results in stress, depression, and other illnesses.
3. Reduced stress
It can be stressful to be working all month round, but you can’t cater to the slightest financial needs occurring before your next paycheck. Such situations may lead you to apply for a loan, adding to your distress as you figure out how to deal with the debtors.
Introducing financial literacy skills in the workplace helps employees avoid stressful occurrences because they have budgeted and planned them.
4. Increased job retention and workplace loyalty
Regardless of the job market toughness, talented and well-performing employees are constantly being hunted by high-ranking organizations. 30% of newly hired employees are likely to leave their new jobs in six months, especially when they receive a better offer.
However, it’s hard to stop working for a company concerned with its employees’ well-being through beneficial programs like financial literacy education. While increasing your employees’ salaries may be the last solution, you can teach them how to manage what they already have in the meantime and watch as the rate of retention in your firm grows dramatically.
3 Ways To Boost Financial Literacy in the Workplace
1. Plan financial literacy workshops
Workshops come in handy when teaching your employees how to be financially literate and more responsible with their money. You can also issue reading material that guides the employees on the benefits of proper financial planning, how different packages work, and more about taxes, pensions, and suitable investments.
2. Introduce useful financial planning tools
You can suggest helpful tools to help the employees budget their finances and spend them wisely. Most apps have different categories involving expenditure, savings, checkings, mortgages, and credit card accounts. They are also user-friendly and can be operated by employees from various departments.
Additionally, you can teach the employees to use a payment gateway to transact virtually and keep digital track of their financial activities.
3. Discuss the leading causes of financial struggles
Despite earning decent salaries, some employees will face financial problems due to different factors. You can incorporate a counseling program with financial literacy training in the workplace to understand the main cause of individual financial struggles.
For instance, they may be dealing with a chronic illness of a loved one, the struggles of single-parenthood, and drug or gambling addictions, among other issues. Understanding this will help you design practical workshops on financial literacy for everyone.
Conclusion
Employee productivity and motivation define a healthy working environment to clock in every assigned day. However, stressed and demoralized workers find it hard to keep a straight mind and focus on the tasks at hand.
Financial problems are among employees’ main challenges, but this can be reversed through educational workshops and programs offering financial literacy skills in the workplace.