IMPROVING FINANCIAL LITERACY IN THE WORKPLACE: 7 STEPS EMPLOYERS CAN TAKE

Research has shown that employees who receive financial education and support are more likely to make informed financial decisions, take advantage of their employee benefits, and feel more confident in their financial lives. As an employer, it is in your best interest to promote financial literacy in the workplace as part of your workplace wellness initiatives.

What does employee financial literacy look like?

Employee financial literacy refers to the level of knowledge and understanding an individual has about personal finance, including budgeting, saving, investing, debt management, and retirement planning.

Financially literate employees have the ability to make informed decisions about their finances, which can have a significant impact on their overall financial wellness. They understand how to manage their money effectively, make smart investment decisions, and create a plan for achieving their financial goals.

Financially literate employees also understand the importance of employee benefits, such as retirement plans, health savings accounts, and insurance policies. They know how to evaluate their options and make the best use of these benefits to support their financial goals.

Benefits of financial literacy in the workplace

There are numerous benefits of financial literacy in the workplace. Financially literate employees are better equipped to handle financial challenges, make informed decisions, and achieve greater financial stability and security. This, in turn, can lead to reduced financial stress, which is a significant cause of employee absenteeism, turnover, and reduced productivity. Promoting financial literacy for employees can also be a crucial element in shaping the importance of organisational culture by demonstrating your company’s commitment to workplace wellbeing. All of these factors can help to increase employee engagement and job satisfaction, while also improving risk management skills for employees.

It’s important to note that investing in financial literacy training for employees is a win-win for both employees and employers, not just employees. Employers that promote financial literacy in the workplace can enhance their brand reputation, as a socially responsible employer, which can help attract and retain top talent.

How to help your employees build financial literacy

By following these seven actionable steps, employers can help their employees build the financial literacy skills they need to achieve greater financial stability and security.

Step 1: Identify financial literacy skills

Assessing your employees’ current financial literacy skills is a crucial first step in developing an effective financial education program. You can determine appropriate financial literacy topics for employees by conducting surveys or assessments. This will allow you to gather information on your employee’s current level of knowledge, their financial habits, and the areas where they may need additional financial education or support.

Once you have identified the areas where your employees need improvement, you can use this information to tailor your financial education program to meet their specific needs. For example, if your employees are struggling with managing debt, you may want to focus on topics such as budgeting, debt reduction strategies, and credit management.

It’s also a good idea to consider the different financial literacy levels among your employees. Some may be more advanced than others, and could require more advanced content, while others might need a more basic introduction to financial concepts.

Step 2: Develop relevant content

Developing relevant content is a critical step in helping promote financial literacy for employees. The content you create should be focused on the financial literacy topics for employees that you chose in the above step, and should be designed to be both useful and engaging. One of the most common mistakes leaders make is not listening to their employees and not tailoring the financial literacy content to their needs and preferences. This can result in disinterest and a lack of engagement, which can hinder the success of the program.

Once you have identified appropriate financial literacy topics for employees, you can begin creating content that is tailored to your employees’ needs. Consider using a variety of formats to appeal to different learning styles, such as videos, webinars, interactive modules, or written materials like articles and worksheets.

Step 3: Decide on delivery method

When deciding on the delivery method for your financial education program, you will need to consider various factors such as the size of your organisation, the demographics of your employees, and your budget.

If you have a large employee base, an online program may be more practical and cost-effective than in-person training. On the other hand, if your employees are mostly non-tech savvy or prefer face-to-face interaction, in-person training could be a better option.

Another key consideration is whether the financial education program will be mandatory or voluntary. If it is mandatory, employees could feel forced to participate, which might impact their engagement and willingness to learn. Meanwhile, if the program is voluntary, you may need to provide incentives or promote it heavily to encourage participation.

Step 4: Integrate existing training

Integrating financial education into your existing training programs can have several benefits for your organisation. By incorporating financial literacy training for employees into your onboarding process, you can help new hires understand the financial benefits and services your company provides, while also teaching them how to make informed decisions about their financial future with the company.

Professional development is another opportunity to integrate financial education. You may want to offer workshops or webinars on financial topics that are relevant to your employees’ careers, such as budgeting for freelancers or investing in the stock market for those in finance roles. This can help employees see the connection between their personal finances and their professional development, making the training more meaningful and effective.

Step 5: Offer incentives

Offering incentives can be an effective way to encourage participation in financial literacy training for employees. Incentives could be monetary, such as bonuses or gift cards, or non-monetary, such as extra vacation days or recognition.

When designing an incentive program, it’s important to keep in mind the overall cost and potential impact on employee motivation. Incentives should be offered in a way that is fair, exciting, and equitable, so all employees have an equal opportunity to participate and earn rewards.

Step 6: Track employee progress

Keeping records of employee participation and progress will help you evaluate the effectiveness of the program and determine whether it’s meeting your intended goals.

There are several ways you can track employee progress. One option is to use a learning management system (LMS) to monitor participation and completion rates. An LMS can provide detailed data on employee engagement, including how long employees spent on each module, which modules they completed, and which modules they may have struggled with.

Another option is to use surveys or quizzes to assess employee knowledge and understanding of financial literacy topics. These can be administered at various points throughout the program to gauge employee progress and identify areas where additional support may be needed.

Step 7: Provide ongoing support

Financial education is not a one-time event – it’s an ongoing process. It’s crucial to provide employees with ongoing support to ensure that they continue to build their financial literacy skills. One way to provide ongoing support is by offering additional resources, such as financial coaching or access to financial planning tools.

In particular, financial coaching can be a valuable resource for employees, as it provides them with one-on-one guidance and support to assist them with managing their finances effectively. Coaches can help employees create personalised financial plans, track their progress, and adjust their plans as needed.

Financial planning tools, such as budgeting apps or retirement calculators, can also be useful for employees who want to take a more self-directed approach to their financial education.

Empower your employees with financial literacy

Helping your employees build financial literacy is not only beneficial for their personal financial health, but it can also positively impact your company’s bottom line. By taking action and investing in financial literacy training for employees, you can improve their wellbeing and contribute to the success of your business.

If you’re looking for programs to help your employees improve their financial acumen, contact DeakinCo. today to find out more about our bespoke range of programs. From basic financial concepts to advanced financial planning, our programs  are designed to help individuals and organisations develop the knowledge and skills they need to make informed financial decisions.