Financial literacy is at the forefront of employee engagement and productivity now. How did that happen? How did organizations suddenly become important in the financial management skills of their employees? It happened ever so slowly.
Organizations started becoming concerned about how their employees spend their money because they’ve seen the impact of bad debts and bad decisions on skillful and talented employees. Everyone wants to learn how to manage their finances well, but not everyone has the resources nor the ability to decipher the right from the wrong information.
Most people rely on the Internet to give them advice on how to handle their money. The problem is the advice they get from there is not tailor-fit to their circumstances. Salaries are not the only differentiating factor in how people manage their money. Each one has different responsibilities, backgrounds, circumstances, lifestyles, etc. There is no one-size-fits-all approach to financial literacy.
The solution, then, is on the employers themselves. Why would you want to meddle into your employees’ finances, you might ask yourself? Employees with better finances are happier, and happier employees are more productive. The more productive they are, the more rewards your business can reap. It doesn’t take a genius to realize that organizations depend on the productivity of their workforce. Forget about highly skilled individuals who have the talent that will make your competitors squirm. Those mean nothing if they are not as productive as someone who has mid-level skills but is willing to learn and help the company.
Teach Them About Investment
So, definitely yes, employers play a big role in teaching their employees about investment. They can do so by making sure there is an item in their contract about retirement funds. Occasionally, employers should also invite a business keynote speaker to talk about how they can manage their finances better. Make sure to invite someone who has the authority to speak about employee engagement and productivity, as well as the best ways to handle their money and avoid money problems.
So, where do you start? The most obvious start point is their retirement fund. Even younger employees need to realize that 50 years down the road, they’ll have to retire on a pension. What kind of lifestyle do they want to live? Do they want to live comfortably? Of course, they do. Everyone does! But to get to that point, they have to be responsible for the way they handle their money and the debts they get into.
How about letting them try their hands in the stock market? Some of them may be naturals. Regularly hold seminars and conferences about stock market trading and long-term investment. This is another passive way to make their money work for them in the future.
If they have enough stocks with stable companies, they can live off the dividends they receive from those companies. They can also sell those stocks in the future and watch as their money triple or even quadruple in value. If they hold their stocks long enough, they’ll be surprised by how much they saved.
Suppose they are not into trading and don’t have the patience to understand how buying or selling stocks and trading work. They can then also invest a portion of their savings into a mutual fund. This is a long-term investment, which means they might not be able to withdraw the funds that easily if they need it for an emergency. However, this is a strong and reliable way for their money to earn instead of sitting in their bank accounts.
Sure, you provide health insurance for them, but how about their families? How about their pets? How about their homes, cars, business, etc.? Employers should teach their workers about the importance of insurance because this is in their best interest. If possible, partner with insurance companies that can offer group insurance packages. This way, your employees can afford the kind of insurance they want at a lower price.
It’s not just health insurance that’s important. They need to invest in a life insurance policy for their families, too. This way, if something happens to them, their families will be well taken care of. This is an aspect of insurance that is lost on so many employees.
It is never too late to take matters into your own hands regarding your employee’s financial wellness. Part of your mission is to see them off to a great retirement. And although there is a genuine possibility that they may leave for bigger organizations in the future, what’s important is that you have integrated into them the importance of financial literacy, money management, and investing for the future.