Financial literacy is indispensable. The ability to understand financial skills, like money management, budgeting, and investing, and use them effectively, is especially crucial now that the US is in an economic crisis. Already, this crisis is causing unprecedented financial stress, so much so that 54% of Americans are now worried about not having enough savings, while another 48% are worried about their bills. Worryingly, 9 in 10 Americans admit to being stressed out financially, with 2 in 5 expressing concern about their financial future.
Indeed, these tough times have amplified the importance of financial literacy, and have once more emphasized why it should be a concern even in places of work. With that being said, here are three specific reasons financial literacy matters in the workplace:
3 Reasons Financial Literacy Matters in the Workplace
Financial literacy helps boost productivity
Some 7 in 10 American workers get stressed by financial problems, and nearly 4 in 10 (39%) admit to being distracted at work by those issues. The result is a dip in productivity, frequent absenteeism, sloppy work, pay dissatisfaction, lack of engagement, and decreased commitment to the organization.
Now, financial literacy won't solve all financial problems. But it can make employees money savvy, to the point that they can minimize these problems and mitigate their effects. The result is a reduction in stress that can boost productivity, as your employees are able to focus more on their work rather than on their money problems (therefore allowing them to perform at a high level).
Financial literacy saves you money
Stress can lead not only to frequent absenteeism, but also presenteeism, or a phenomenon in which employees are present but aren't performing at full capacity. Presenteeism, in turn, costs business some $1,500 billion annually, while absenteeism costs business around $150 billion per year.
Either way, the cost is staggering, and you can lessen it by reducing your team's financial worries, which are the chief stressors of American workers. Eliminating financial stress will also minimize stress-related conditions, like hypertension, and help save your company in healthcare costs.
Financial literacy improves your team's business acumen
Financially literate employees aren't just money savvy; they're also business savvy, as they have a nuanced understanding of the interplay between money, people, technology, and business processes.
With this understanding, your team is likelier to act responsibly, knowing full well that what they do will impact the organization's financial health. In the same manner, they are likelier to make informed decisions that will benefit the company's bottom line. They will also be more inclined to spend prudently and take care of office items to limit expenses that could become liabilities for the business.
3 Ways to Ensure Financial Literacy in the Workplace
Now that you know why financial literacy matters in the workplace, here are three ways to ensure it:
Offer financial education programs
A great way to ensure financial literacy in the workplace is to have your workforce go through continuous financial education beyond the usual 401(K) plan lectures. This education must address a wide range of finance-related topics, including personal finance, and should offer self-assessments that will make everyone aware of their strengths and points for improvement when it comes to finance.
It is equally important that you vary the teaching modalities to allow for both synchronous (employees learning all at the same time) and asynchronous learning (employees learning individually on their own time). For the former, for instance, you can use us to help you in organizing Virtual Lectures while physical distancing is still being encouraged. For the latter, on the other hand, you can upload on the cloud modules on finance for your employees' perusal during their free time.
Help your team break bad finance habits
One of the hallmarks of financially literate people is that they’ve broken bad financial habits, like overspending, not budgeting, and overusing credit cards. But before one can break these bad habits, it is crucial to understand why they have them in the first place, and if there is an underlying disorder causing it. Erika Rasure, Ph.D., assistant professor on the online MBA in financial services program at Maryville University, says that these underlying conditions manifest in bad financial habits, which can then ruin anyone’s finances. Dr. Rasure explains in a Bustle article on money disorders: "Money disorders are best characterized as a combined emotional and spiritual imbalance that creates a propensity to engage in problematic money behaviors.” These include compulsive buying, hoarding, and workaholism. With this in mind, it is vital that you guide your team not only in breaking these bad habits, but also in finding out if there's an underlying problem. And where possible, bring in professional help, or refer your team to financial experts who can address the matter.
The Forbes Finance Council said it best: "Incentives increase motivation and engagement." Suffice to say, you must give your employees enticements to take part in financial literacy improvement.
These enticements needn't be anything grand, as something as simple as gift cards and additional paid leaves might just be the motivation your team needs in order to take financial education seriously. But it is imperative that you provide learning opportunities for your employees, like having on-site financial planners and hiring a third-party finance course provider such as LinkedIn Learning.
The goal of any business owner should be to have a happy, committed, and productive workforce. And as outlined above, one way to ensure that is by improving employees' financial literacy, so they can improve their financial health and get rid of many of the financial issues that stress them out.
Written exclusively for www.executivebound.com By Amaia Calnan
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So this is your invitation and your challenge. Consider: what would that structure look like for me if I were r running my own business while working from home, and as an employee of a company?
What would support you to get ready in the morning and feel energized?
One of the behaviors you may notice is that you will stop shutting off your camera and "show up" to vitual meetings.
In this isolated environment, showing up is crucial and it will help you keep your edge. It's tough to accomplish that when others are staring at a black square on the screen with a little avatar of you.
Showing up means showing your face and connecting with people, face to face. That connection is the best that we've got right now.
Don't waste it. Don't give it up, and don't miss this opportunity to "see" the people you connect with every day.
I'm going to give you a strategy that I use and teach my clients. And this is connecting regularly through a 15-minute cyber coffee.
One of the biggest recommendations that I give my clients is to make networking part of their job. In my book, Fearless Women at Work, I say that networking is not something we wait to do when we need a job, a new opportunity, or need facts about our field.
Networking needs to happen regularly.
It's important to network because, for one, you're going to learn more from people and be able to connect with them on a deeper level than if you're only transacting with them. The goal is to build relationships and move away from being transactional.
The other benefit is that when you need to access your network, for whatever reason, you will actually have one.
As a professional, most of us connect on LinkedIn, and it's the easiest group of people to connect with—people you are already working with or with whom you have worked in the past. Those people know you.
Send them a LinkedIn request. Then, after you connect with them, send them a message and say something like, "Hi, Ginny, I know it's been a while. What's going on with you? How's your family? Would you be open to a 15-minute cyber coffee to catch up?" and provide a couple of dates/times that work for you the following week. And most likely, the person will reply and say, "Yes."
Now, who are the people that you want to connect with? These are the people you have worked with in the past or present who you appreciate and respect and would like to continue a professional relationship.
Include mentors and those you've lost touch with who've sponsored you in previous roles. This could also be people who you're interested in learning from. These are all possibilities as to why you would want to connect with them.
Make sure that you come to the table with an offering. If you check out their LinkedIn feed, you will see some of their most recent activity. Do a little research before meeting with them. See what they've posted or what they've "liked" recently. You can use that as a point of reference when you speak with them.
For some of us, this is very simple. But for others, this could be very difficult and intimidating.
To muster up your courage, do a little research and begin the conversation by simply saying, "How are you doing?" How's the family? How is the job?"
This is only a 15-minute cyber coffee. And if you would like to continue to connect in the future, then say to the person, "Would you be open for me to reach out to you in a couple of months?" That's how you also develop organic mentors and sponsors.
This is one way that you can stand out during the pandemic. If you don't feel that you have the time to network this way, my challenge for you would be to identify one person a week with whom you would like to connect.
Make that one connection. Send them one LinkedIn message, and ask them if they would be open to connecting with you for a 15-minute cyber coffee, and you will be shocked at what you learned.
Many of us find ourselves in tough situations, especially if this is the first time you are working from home.
Whether you're in the office or working remotely, bringing positivity to your interactions will help you stand out.
When working in a hybrid workplace, how do we do positivity to the workplace?