Despite its importance, many Americans lack the financial literacy required to properly handle personal finances. This disparity leaves them defenseless against the challenges that will inevitably arise over time. And there’s no doubt that these challenges can lead to long-lasting, damaging results.
The ongoing gap in financial knowledge is why April was designated as National Financial Literacy Month nearly two decades ago. Today, closing this gap is more important than ever, with the unpredictable economy the COVID-19 pandemic left in its wake. For employers though, financial literacy impacts more than their own personal financial knowledge or that of their team members. It also impacts their organization’s bottom line.
In the workplace, focusing on financial literacy should never be limited merely to the finance department. A team with strong financial literacy skills, regardless of the area in which they conduct their day-to-day activities, can have significant impacts on the organization itself. When employees’ financial concerns are also the concern of their employers, morale increases, absenteeism decreases, and productivity soars. Simply, the financial wellness of employees is inextricably tied to the financial wellness of the organization.
The significant increase of financial wellness programs in the workplace demonstrates that more employers are recognizing this reality. These programs help educate employees on everything from personal finance to stock options to setting realistic financial goals. According to an article in Forbes, “Comprehensive financial wellbeing initiatives (not just an app) in the workplace can play a significant role in addressing basic needs and helping employees start to create a solid financial foundation so they and the organization can thrive.” And while it will take time and money to effectuate these programs, the benefits for the organization far outweigh the costs.
Three Business Benefits of Increasing Your Team’s Financial Literacy
Reduces Stress
According to the World Health Organization, stress has been classified as the health epidemic of the 21st century, with stressed employees costing businesses nearly half a trillion dollars annually. One of the most common ongoing stress factors for individuals stems from finances, which can also lead to physical and emotional health problems. In fact, financial stress can be one of the most dangerous forms of stress, with more individuals avoiding treatment out of fear of incurring costly medical bills.
Increases Productivity
Stress can leave team members feeling as if they have less energy throughout the day. They also often have difficulty focusing during meetings and may be getting distracted at work due to personal calls regarding debt or other concerns. Personal finance issues can take up hours of the workweek—hours that could be spent actually getting work done. When this stress decreases, morale and engagement increase, and by extension, so does productivity. With ease of mind, employees can put their focus back on work. It’s straightforward really—a less stressed team is a more productive one.
Higher Retention
Today, employees want more than a paycheck from employers. They want to work for an organization that cares about their wellbeing, including their financial wellbeing. Offering financial literacy programs and support shows employees that leadership cares and is looking out for their best interests. Employees will appreciate the effort and recognize that the training improved their financial health, relieving huge amounts of stress in their daily lives. The correlation between their newfound financial (and overall) wellness with working for the company that provided it to them will not go unnoticed.
For many employees, the workplace may be the only opportunity they have for financial training. And for employers, it’s one way to set employees up for success, providing them with a potentially life-changing experience, while receiving significant business benefits at the same time. At Agile Planners, we live and breathe financial literacy—for ourselves, for our clients, and for others we serve. We can provide you with CFO and bookkeeping services, as well as the training needed to help your team increase their financial literacy. As a one-stop shop to fill all types of accounting needs, we take over bookkeeping and accounting tasks, integrate technology systems for optimal performance, and provide consulting services to develop a strategic plan for your business to grow and reach its goals. We’ll take care of the nitty-gritty so that you can focus on the bigger picture: running your organization. Contact us today to learn more about how we can help.
