In previous posts I have mentioned the importance of teaching children about finances. Along with that is teaching Employee Financial Literacy. Many of us were not taught how to manage finances when we were in school. In many cases also, people are trained how to practice their profession but then get out of school and do not know how to run the “business” part of a business.
Studies show that in 1979, 10% of adults reported they had stress from personal finance difficulties, in recent studies that number has climbed to 25%. Employees often list financial stress as the top source of all types of stress they experience.
For employers, financial literacy education in the workplace can lead to improved motivation, improved recruitment and retention of staff. Providing employees the tools to become financially literate about the basics – knowing how to manage personal savings, understand credit and create a spending plan helps improve factors that affect the organization’s bottom line, such as productivity.
Employees under financial stress can be passive, unengaged in their work, confused and anxious about mortgage and college loans, vehicle and credit card payments and more.
I feel it is now more than important than ever to face these issues. When people are having difficulties with their finances and start borrowing, that borrowing cannot go on forever and someday they will have to face it. The sooner they get to the root of the problem and start solving it the better. Also, if we educate employees they will be better equipped to teach their children about finances.