Creating a healthy working environment that values employees’ well-being begins with providing useful benefits. One of the most significant benefits that companies can offer is a chance to become financially literate. Beyond good compensation, health insurance, or paid leave, financial literacy programs impact businesses in a unique way. Here, we are going to discuss just what happens when these programs are not in place, and give tips on how HR personnel can implement them.
The Importance of Financial Literacy
A study by Northwestern Mutual found that finances are the main source of stress for nearly half of all Americans, with 40% particularly anxious about retirement savings. This is not surprising, given how the majority of workers in the country are in danger of a financially unstable retirement. In fact, Yahoo Finance reports that a whopping 64% of Americans will retire broke, with 19% having less than $10,000 in their retirement fund.
While factors like unemployment or low salaries are often to blame, part of the problem is the lack of financial literacy, which influences aspects like housing and retirement. Case in point, a survey by Marcus reveals that 6 out of 10 Americans don’t have an established 401(k) with their employer, leaving them financially unstable when they retire. This instability is affecting employees in negative ways at work, causing anxiety that leads to lower levels of productivity.
The Global Benefits Attitudes Survey confirms that there is a strong connection between stress and work performance, not to mention levels of absenteeism in the office. Implementing financial literacy programs can combat the stress caused by mishandling personal funds and savings. It can provide employees with the concepts and tools that can empower them to meet their needs and have enough left for their wants. Plus, The Business Journals point out that an effective financial literacy program is one of the key benefits that promote employee retention and job satisfaction.
Improving Financial Literacy
A good place to start when trying to improve financial literacy is rethinking your company culture in relation to money. Finances can be very personal, and people may be uncomfortable discussing these matters in the workplace. Sending out material about financial literacy every now and then can signal an important shift in this mindset, allowing for a more open approach to the journey to becoming financially literate and healthy.
Aside from providing infographics or reading materials about budgeting, savings, and even self-discipline, you can also incorporate technology. There are a variety of online resources — from YouTube videos to free online short courses — that anyone can access and learn from. You can also encourage employees to use budgeting and finance apps to track their spending and plan their savings.
Of course, unless you have an in-house finance expert, one of the best options for implementing all of the above is to seek external support. You can look for consultants or even hire a financial counselor to improve your financial literacy programs or conduct workshops and seminars. Joe Blattner, President of COMPackage, emphasizes how investing in these measures is a small price to pay compared to the long-term benefits that your company will reap. After all, when employees are free from the distraction of financial stress, they can focus on things that really matter in the workplace.