Financial Literacy Training as an Employee Benefit

People are concerned about their finances today.

Over 50% of Americans have unsecured debt of $100,000 or more. No, this is not just school loans.

Credit card debt is at an all-time high putting stress on households across America.

As an employer, it is likely some of your employees are struggling with a greater load of personal debt due to inflation and the job market.

This most likely affects their mental health and productivity on the job with their financial issues being an added distraction and stress that they bring with them to the office. It is also hard for employees when they get collection calls during the workday to remind them of the financial weight they carry.

Despite this rising trend – it is still a private matter that people do not discuss openly. Most employees do not want their employer to know how much they are struggling financially.

Is there anything you can do as their employer besides providing a paycheck?

One of the best things you can do is to promote financial literacy to your employees. There are ways you can do this while also protecting your employees’ privacy.

The Value of Financial Literacy

Financial literacy is the knowledge and understanding of financial concepts and practices that enables individuals to make informed and effective decisions with their financial resources.

This includes knowledge of basic financial concepts, such as budgeting, saving, investing, borrowing, and managing debt. It also includes an understanding of financial products and services, such as credit cards, mortgages, and retirement accounts.

Financial literacy is important because it empowers individuals to make informed decisions about their money and to take control of their financial lives.

It can help individuals avoid common financial pitfalls, such as high-interest debt and poor investment choices, and to build a solid financial foundation for themselves and their families.

Providing Financial Literacy Training for Employees

Employers can play a valuable role in helping educate their employees about financial literacy.

Here are some ways that employers can support financial literacy education:

• Offer Financial Education Resources: Consider promoting workshops, seminars, or online courses to help employees learn about personal finance topics. Employers can host financial wellness events, such as financial health fairs or lunch and learn sessions, to raise awareness about financial literacy.
• Provide Financial Planning Services: Provide access to financial planning services, such as financial advisors or planners, who can offer personalized advice and guidance to employees on financial topics.
• Offer Retirement Planning Resources: Check with the company that you use for retirement benefits to see if they have educational resources for your employees.
• Incorporate Financial Wellness into Benefits Packages: Offer financial incentives for healthy financial behaviors, such as matching contributions to retirement savings plans, or providing access to financial wellness apps or tools.

Protecting Your Employees’ Privacy

When providing financial literacy education, it is important to respect the privacy of employees. Even though this can be a sensitive topic for people, there are ways you can approach this with creativity and objectivity.

Here are some ways that employers can provide financial literacy education while protecting employee privacy:

• Use Third-Party Resources: Check with your benefits representative to see if they have suggestions on how you can outsource training to third-party representatives.
• Encourage Private Consultations: If you are promoting financial planning services, encourage employees to schedule one-on-one consultations with a financial planner to discuss their individual financial situation and goals. This can help to maintain privacy and provide personalized advice.
• Ensure Confidentiality: Ensure that any personal financial information remains confidential and is not shared with other employees or third parties without the employee’s consent.
• Use Generic Examples: When discussing financial topics, use generic examples instead of real-life situations. This can help to maintain employee privacy and prevent any sensitive financial information from being shared.

Promote Resources from the Experts

The good news is that there are tons of resources available for self-education in financial literacy. You don’t have to re-invent the wheel or feel pressured to be the expert yourself.

For example, consider purchasing a book on personal finance and give a copy to every employee to provide opportunities for self-education.

Also, you could check your community college for evening classes on financial management that are normally reasonably priced. Or provide your employees links to different Podcasts and other digital content as a convenient and free option to learn financial principles.

A Long-Term Investment

One of the best things you can do as an employer is to simply be aware and sensitive to the fact that your employees have their own personal lives. Many people today are facing financial strain, and it might be adding more stress to your employees.

Be creative in your approach in promoting financial literacy. Consider making this a regular part of your employee meetings and benefits package that you can review each year with your staff.

The extra effort today might produce long-term benefits for years to come.