Improving your employee’s grasp of finances has some benefits for your business.
Financial literacy helps employees improve their personal situation. As a result, they are better able to focus on their work, and are more likely to be in a good frame of mind, which boosts productivity.
Being in debt is stressful. Getting calls from creditors is stressful. We know—we used to make collection calls, and people put in a lot of effort into dodging collection calls.
Even when employees can cover their current commitments, they may have financial stress over price increases. A workplace financial literacy program can ease that anxiety and likely reduce stress in the workplace. In general, Human Resources would see that employees are not borrowing from colleagues; staff members are not continually discussing their financial worries with colleagues; HR would not be rejecting frequent loan or cash advance requests.
A workplace financial literacy program would help reduce overall stress for employees in a few ways:
1) It gives employees the skills to take control of their personal finances
2) Employees understand
the difference between useful and dangerous solutions
3) It shows them what
steps to take to improve their financial health
Ongoing stress about personal finances can negatively affect an employee’s mental and physical state well-being; often afflicted with aches and pains caused by tense muscles.
The increased levels of cortisol in the body affects the body’s overall hormone balance and impacts several systems such as hunger regulation, blood sugar control, immunity, sleep, and mood regulation.
The disruption predisposes employees to conditions such as diabetes and cardiovascular disease.
The upshot is that they require more medical attention, increasing their healthcare costs. If you are paying their medical insurance, the premiums increase.
When employees are better able to manage their stress, they should naturally start to feel healthier. Their moods should also become more balanced and positive. Absenteeism due to illness or depression should decrease.
30% of new hires leave within three months. Even in a tough job market, great employees are in high demand. If you wish to keep them focused on your business, you need to provide benefits that few others do.
What’s more valuable? Providing a 1% pay increase over the competition, or teaching the person how to make the most out of their salary every month?
The workplace is changing, and so are employee goals. The days of sticking with one company for life are over. People are choosing experience over money today.
Companies with a distinctive culture are ahead of their competitors and can attract top talent. Providing employees with life skills that help them outside of working hours shows that you care.
More importantly, employees would have a better sense of loyalty to the company. You helped them improve their financial situation; they would want to reciprocate.
Desperation makes people do things they would never normally consider. They might be tempted to misuse the company’s funds.
Staff in need are also vulnerable to the less-than-savory elements of society. They might be approached about buying confidential customer information, proprietary secrets, or company operational schedules.
While most people are inherently honest, the allure of an easy solution could be overly tempting.
Startups might need to think of alternative ways to attract top-level staff. Some options might include stock options, daycare facilities, or gym facilities at work.
These choices benefit the employee but usually replace some of the cash components of their salaries. The employee gains more than the primary cash value but might not always understand the benefits.
By teaching them about managing money and investments, you highlight the value of their perks. They develop a new understanding of their actual worth to the company.
Side hustles are becoming more common and can become a
nightmare for Human Resources. It is difficult for staff not to let their
secondary work interfere with their full-time primary job, especially when the
side hustle is something they are passionate about.
They might become distracted at work or too tired to put in a full day’s effort.
While they are unlikely to compete in the same industry as you, they could inadvertently tarnish your reputation by association. If, for example, they fail to deliver on a promise to a mutual client, it might reflect poorly on you.
Furthering one’s education is often expensive. Around 60% of the workforce lack basic working skills. The staff members that are battling to cope cannot afford to upskill themselves.
Those with full-time jobs and reasonable financial security might not feel the need to continue learning.
Financial wellness programs emphasize the importance of continued education. As your staff members become financially literate, they could become more motivated to upskill themselves further.
Better yet, they would be in a better financial position to pay for their studies and understand how to seek aid.
Working for a business and owning one are two very different experiences. A staff member receiving their paycheck every month might not understand or appreciate how vital their productivity is to the company.
They might see a soaring stock price or a million-dollar turnover and think that the business is in great shape. It is a misconception that could lead them to believe that they are getting a bad deal and want to leave.
With a basic understanding of how finances work, they would better understand their role in growing the business and realize that your business doing well improves their financial future.