Your employees may be experiencing financial difficulties that create anxiety, guilt, and even fear in the workplace regardless of income level or financial education. These feelings often fly under the radar but manifest themselves via workplace distractions, decreased engagement, employee burnout, or even impacts to their mental and physical health. An examination of the financial wellness programs you offer might be worth it in making the difference between a financially educated and a financially empowered staff. This is important because the difference often rests in their willness or confidence in execution. The stats on financial literacy are alarming and include but aren’t limited to:
- Roughly 85 percent of Americans are anxious about their finances and that anxiety directly impacts their work.
- Financial stress contributes to productivity losses, increased absences and healthcare claims, higher turnover, and the increasing costs associated with workers who cannot afford to retire on time.
- Employee financial health and retirement readiness solutions create opportunities for employers to build a healthier and more productive workforce while building a solid foundation for a healthier and more profitable business.
While business leaders don’t have an obligation to address the issues of a financially illiterate or financially disenfranchised staff, they do stand to benefit by taking the problem head on. Here are four ways investing in the financial empowerment of your employees can make a difference in your business.
Engagement – Employees who worry about their financial well being may have a hard time being fully present at work. By addressing that area of focus you in turn create a more engaged staff. It’s the difference between having an employee show up and do the bare minimum to collect a paycheck, and having an employee show up with a desire to stretch, grow, and participate in unpaid initiatives that further the progress of the organization. More than that, one employee’s engagement can be contagious. Without the distractions that come with financial trauma you can be assured your employees will be their best selves, and encourage others to as well.
Employee Retention – Three things motivate employees to leave a job; leadership, pay, and growth opportunities tied to both. Although your hands might be tied in how much more pay you can provide an employee given the scope and function of their role, you can certainly help an employee feel more confident with their current salary by addressing issues that may make them think it’s just not enough. When issues like mounting debt, life events such as marriage, childbirth, and retirement, or the abuse of income on hopeful expenses like lottery tickets or gambling are at the forefront of employee focus, you can rest assured that they will jump at the opportunity to leave for greener pastures ill prepared to handle the adjustment that comes with lifestyle inflation due to greater take home pay. This can add costly recruiting and onboarding efforts while disrupting the flow of production that may impact general employee morale.
Diversity & Inclusion – Diversity, equity, and inclusion has a heightened strategic focus across many organizations. With efforts aligned to support, highlight, and uplift historically disenfranchised populations, a focus on financial empowerment should complement those efforts as many in the target demographic don’t have a background that models what financial wellness should or could look like. Often they assume the role of trailblazer in their families and communities with regard to education, income, and career. It can be both exciting and burdensome to be the first of anything, and with that burden there can also be guilt, anxiety, and fear around making the right decisions at the right time for themselves and for their families. As a leader you would be doing your company and employees a disservice by embracing the principles of diversity, equity and inclusion without embracing the very real need for financial empowerment and financial wellness programming to improve the financial positions of those you seek to elevate. Not only does this have an incredible impact on the population of employees you serve, but it also has a huge impact on your brand as an organization in fully embracing a diversity, equity, and inclusion strategy that includes financial empowerment.
Pay It Forward – Financial literacy is at the forefront of many discussions across both professional and educational industries with programs designed to teach their audiences what they should be doing instead of addressing why they aren’t doing it. You offer the retirement benefits, the employee stock purchase plan, the HSA or FSA, and maybe even some equity sharing program but you still have employees who don’t take advantage. Financial literacy may solve the how but doesn’t solve the why. Your employees may have experienced financial trauma that they just can’t seem to get past in order to make the right decisions with their money and because it’s a taboo topic they never discuss it. Financial empowerment addresses the underlying issues that impact mindset and follow through behaviors at all levels of the business. That means that senior leaders and executives can not only address their own financial hang ups, but can partner with those less senior and provide mentorship that helps prepare them to succeed as future leaders creating an internal ecosystem that promotes holistic growth extending beyond political power and title, and into the factors that impact production, engagement, retention, and representation aimed for through DE&I. Money management is mindset management and a financial empowerment program can make a difference in your company’s and your employees bottom line.
Written by Rahkim Sabree.
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