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8 Ways to Empower Employees Through Financial Education

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These days, many people are dealing with stress from all kinds of personal financial concerns. This can harm workforce wellbeing — especially when people aren’t sure how to manage these issues or who they can trust for advice. That’s why organizations are increasingly offering workforce financial education.

But which strategies are most effective in helping employees develop financial literacy — especially considering that everyone has a different level of financial knowledge and experience?

We asked HR superstars to share one recommendation from their employee benefits and DEI programs. Here are 7 of the best suggestions we received:

  • Offer Resources to Help Employees Make Informed Choices
  • Host Budgeting Workshops and One-on-One Coaching
  • Think in Terms of Financial Wellness
  • Be Sensitive to an Employee’s Financial Literacy Level
  • Keep Equity in Mind When Offering Resources
  • Add More Benefits Instead of Outsourcing
  • Leverage Employee Questions and Anecdotes

To learn more about how you can make these ideas work for your organization, read the full responses below…

7 Proven Ways to Boost Employee Financial Education

1. Offer Resources to Help Employees Make Informed Choices

Financial literacy is an important life skill that can have a major impact on an individual’s overall wellbeing. Unfortunately, many employees lack the financial knowledge and resources necessary to make informed decisions about their money. As a result, they may end up making poor choices. And those choices can lead to serious financial problems down the road.

However, there are steps HR leaders can take to help employees improve their financial literacy. For example, you can offer resources to help employees make informed financial decisions. This can include access to basic financial education courses, budgeting tools, and debt management assistance. 

By tapping into these resources, employees gain the knowledge and skills they need to make better money decisions, avoid future financial difficulties, and improve their overall wellbeing.

Teresha Aird, Chief Marketing Officer and HR Lead, Offices.net

 

2. Host Budgeting Workshops or One-on-One Coaching

At our company, we offer different levels of financial education and resources. We recognize that not everyone is comfortable discussing or learning about personal finance, so we want to ensure we provide various resources that cater to different needs and preferences.

For example, we provide budgeting workshops for employees who want to get a better handle on daily money management. And for those who prefer a more personal approach, we offer one-on-one financial coaching. We also provide resources on our intranet and website for employees who want to learn more about finance-related topics on their own time. 

By offering a variety of resources that address different interests, we hope to make it easier for all of our employees to understand and take control of their finances.

Tracey Beveridge, HR Director, Personnel Checks

 

3. Think in Terms of Financial Wellness

Some organizations approach their benefits and DEI programs from a “financial wellness” perspective. Financial wellness is about much more than money management — it’s about creating a holistic, well-rounded view of one’s financial situation and health.

A financial wellness program can address people with different levels of financial literacy in several ways. One common approach is to provide employees with a variety of financial education options and resources, depending on their needs and interests. For example, employees who are just starting out may need more basic information on topics like budgeting and saving for retirement. Those who are further along in their financial journey are likely to benefit from more advanced topics like investing and estate planning.

No matter what an employee’s level of financial literacy may be, it’s important to provide them with accurate and up-to-date information. This means employers should plan to regularly review, refresh and adjust available content, courses, tools and resources.

Linda Shaffer, Chief People Operations Officer, Checkr

 

4. Be Sensitive to an Employee’s Financial Literacy Level

It is important to provide employees with the resources they need to make informed decisions about benefits and DEI programs, without forcing them to take part in activities they are not comfortable with.

One approach is to provide employees with resources that are tailored to their level of financial literacy. For example, you could offer an online course for employees who want to learn more about personal finance. Or, you could provide a list of recommended books or websites for employees who want to learn more on their own.

Another approach is to hold workshops or seminars on various financial topics. You can tailor these events to different levels of financial literacy so all employees can benefit from the information presented.

Alysha M. Campbell, Founder and CEO, CultureShift HR

 

5. Keep Equity in Mind When Offering Resources

It’s important to understand that we all start at different places in life. While this may seem like a given, many struggle with truly understanding how this applies to financial literacy. 

Specifically, many individuals from different racial backgrounds were not privy to having a mother or father to teach them the ins and outs of financial literacy. This is why equity is so important in the workplace. Equity recognizes that giving everyone the same tools or resources isn’t effective, and instead ensures that each individual has what they need to be successful. 

Keeping equity in mind when planning and managing your employee benefits offerings is one way to ensure that each employee has what they need. Resources every employer should offer include financial coaching, legal assistance, and workshops about credit, budgeting, and the importance of investing.

Tawanda Johnson, HR Leader, Sporting Smiles

 

6. Add More Benefits Instead of Outsourcing

Our employee benefits are managed through another company, so we aren’t able to decide what most of the options are. However, this past year, the benefit premiums increased. Still, the company could add more benefits to make the overall package more robust and attractive to current and new employees. Adding these incremental benefits could help offset the premium increase.

Lindsey Hight, HR Professional, Sporting Smiles

 

7. Leverage Participant Questions and Anecdotes

When addressing financial topics in DEI programs where attendees have different financial literacy levels, we want to help participants understand the benefits of concepts like retirement plans, debt management, and budgeting. Then we explain the fundamentals of these subjects.

An excellent way to explain these concepts is by welcoming questions from attendees. Then we use real-world examples to make the topics clear enough for individuals, no matter what their financial literacy level may be.

Grace He, People and Culture Director, teambuilding.com

Image by AlohaFlaminggo

Financial Literacy: Current State and Impact on Post-Pandemic Workplaces

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The pandemic has altered almost every aspect of our lives. It has exposed fault lines in our country, workplaces, and at home. Many of us didn’t realize one area would significantly impact us as it has: financial well-being. This is why it is more important than ever to talk about financial literacy: 

According to a survey from the National Endowment for Financial Education:

  • 88 percent of Americans say the COVID-19 crisis has caused stress on their personal finances
  • 89% believe that lack of financial education contributes to larger-scale social problems in America
  • And 83 percent of HR professionals report that personal finance worries had an enormous impact on overall employee performance

So, as we look ahead to what a post-pandemic workplace looks and feels — and because we know business leaders and HR professionals want to do everything possible to keep employees focused and productive — we at TalentCulture must ask a tough question:

What role should employers play in the financial literacy of their employees?

Our Guest: Personal Finance Expert and Mentor, Danny Kofke

Danny Kofke, a Motivational Mentor for Mentoro — a financial education company that provides a turn-key financial awareness solution — joined me on this week’s episode of #WorkTrends Conversations to help answer our question. Danny began our conversation by telling us what aspects of financial literacy have changed most since the pandemic started:

“Unfortunately, even before the pandemic hit, a lot of people weren’t doing well with their money. But the pandemic has definitely had a detrimental effect on many people’s finances. Many are not aware of their options; they are relying much more on debt.” After Danny, a former school teacher, explained that financial literacy is never taught in school, he emphasized that the sense of urgency for many employees is real; people are hurting now. He then answered our question about how employers can help:

“The pandemic is almost over. But for many, the next crisis — a financial crisis — is coming. That’s where a financial wellness program can definitely play a part.” 

Which is precisely the role employers can play as we co-create the post-pandemic workplace with our employees.

The Key to Financial Literacy: Employer-Driven Education

“The annual cost of financial stress to the employer,” Danny went on to say, “in lost productivity and absenteeism is over $2,000 a year per employee. An employer-driven financial wellness program not only help minimize that stress, but it also increases company loyalty.” Danny added that employees see this benefit as an example of their employer going above and beyond, providing education designed to help them with their finances and overall well-being.

During our conversation, Danny convinced me that employers are uniquely positioned to help their employees become financially literate — today and in the long-term. For employees struggling with their post-pandemic financial situations, employers can help right away by saying:

“I’m never going to allow my employees to face this alone again. We can help take this burden off them.”

To learn more about Danny and how he can help you help your employees, reach out to him on LinkedIn.

And, of course, as you consider a financial wellness program as part of your comprehensive employee benefits package, check out Mentoro — and be sure to thank them for sponsoring this episode of #WorkTrends Conversations!