Financial literacy is a topic that affects everyone. It has been found that poor money management skills lower employees’ productivity in the workplaces. It is in the employer’s best interest to provide access to financial literacy.
However, financial literacy — the ability to use and understand financial information, financial management, and skills — is an often neglected concept. As it turns out, improving financial literacy provides incredible benefits, especially for employers and employees.
Max Funding business advisor Shane Perry says, “Improving financial literacy among all individuals within a company can foster better work environments and increase overall productivity. Numerous studies were conducted, and most of them found that when financial knowledge is improved, both the employer and employees win.”
Shane Perry is right. Multiple studies and surveys from Harvard and PwC found that increasing financial management skills and improving literacy skills benefit the workplace. We can narrow down these benefits into the following;
Employers can expect to have a more knowledgeable and better-equipped workforce by holding financial literacy seminars and other related training sessions. Knowledgeable employees, in turn, function more efficiently and contribute more to their team and the organization.
Furthermore, a financially literate employee is economically efficient, can make more informed decisions, advocates for the team’s budget, has better negotiation skills, and understands the bigger picture and the role they play in it.
Stress, when kept at bay, can spur a person into action. Too much stress, however, is detrimental to a person’s overall health. Also, prolonged emotional stress can lead to headaches, a weakened immune system, high blood pressure, and many chronic illnesses.
Likewise, a PwC survey recently found that 54% of Australian workers classify financial challenges as the largest source of stress and worry. As a result, this costs Australian businesses around $31.1 billion per year due to lost productivity.
Thus, it’s safe to say that fostering financial literacy and teaching employees necessary personal financing skills can alleviate stress and decrease its side effects, especially in employees’ mental health.
According to research, stress causes employees an extra 2.4 sick days per year on average. A Salary Finance survey also found that financially challenged employees are 5.8 times more likely to skip deadlines and are more likely to produce low-quality work.
Conducting employee financial literacy programs could help workers alleviate economic challenges, increase their productivity, and improve their work output.
A report of Ceridian’s 2018-2019 Pulse of Talent Report revealed that 37% of employees worldwide are unsatisfied with their work and are actively looking for other jobs. Providing employees with benefits, including personal finance and financial literacy training, could help them enjoy working for your company,
Moreover, the 2019 PwC Employee Wellness Survey found that employee loyalty is affected by how much they feel that their company cares. By providing them with education about topics on financial management, employers can show that they care about their employees and their life outside of work.
Given these benefits of financial literacy, employers should step up to the challenge of providing their employees with the necessary tools and information regarding finance topics. An excellent way to start is for company heads to conduct surveys to determine the needs of their employees. By taking the first step in approaching employees, managers can show compassion and care, increase morale, and strengthen workplace relationships.
Of course, employers cannot do this alone—this should be a collaborative effort. Employees should voice their concerns regarding training and seminars. By taking the initiative and approaching the HR or a manager, employees can collaborate with upper management to make a skilled, efficient, and tight-knit organization.
Financial Mappers believe that educating employees about their finances can benefit them and the company altogether. Employers can expect a boost in overall workplace productivity by allowing workers to communicate with financial advisors and encouraging them to join various seminars.
Malcolm Williams of MDT Connect with the help of Financial Mappers can help you arrange an Employee Financial Literacy Program.