When you think about the workplace, a lot of things probably come to mind: the morning commute, meetings, coworkers, and even lunch time, but what about financial literacy? It’s one of the least spoken about aspects of most work environments, but it’s one of the factors that has the largest impact. But, why? And, what exactly is financial literacy?
Financial literacy is, at its core, the understanding of various financial areas such as personal finances, money, and investing, as well as the skillset to effectively manage those things. It’s a powerful tool that can greatly reduce everyday stress as well as open up many doors to new opportunities. But, financial literacy doesn’t just stop at home. It has a big impact on people at work as well.
When a person doesn’t have access to the proper resources, they often struggle to maintain their financial health. This leads to stress, and that can have a very negative impact on the workplace. According to recent statistics, 30-80% of workers spend time at work worrying over their personal finances and problems instead of working. That leads to a decrease in productivity and, eventually, morale.
Financial stress can also have a negative effect on employee attendance and even on turnover rates. An employee who is unhappy with their financial position is more likely to leave their current job for even a small pay raise than an employee that is happy with where they are.
Fortunately, there are things employers can do to help their employees overcome financial stress and improve their standings. Providing financial education for employees not only benefits them, but the business and workplace as well. Studies have found that financial education can boost morale and help foster positive cross-team relationships by reducing stress. This is down by taking the strain off their financial life by helping to address and fix problem areas. Employees who are under less stress will be able to focus on their work more effectively and communicate better. When communication between different departments is better, that also helps to decrease overall workplace stress and create a more positive environment. Even employees who are under relatively low financial stress can benefit from financial education and continue to boost things around the workplace. Someone who is already productive will become more productive, and contribute to the positive culture a business is trying to foster.
Positivity isn’t the only thing financially literate employees will contribute to in the workplace. It can also help businesses save money. Long-term stress can have a large impact on employees’ health. Financial stress has been linked to health concerns such as migraines and cardiovascular disease. Such things lead to an increase in employee absenteeism due to unexpected illness. By providing financial education to employees, financial stress is reduced and so are the amount of sick days taken. This, in turn, reduces the cost of health care, worker’s compensation, and even disability management claims. Workers are then able to perform better because they aren’t distracted by as many financial or health issues.
But, financial literacy isn’t just about the here and now. It’s a long-term investment. Half of workers “say they are less than knowledgeable or not knowledgeable about investing,” and a majority of employees “lack very basic knowledge of their 401K plans.” By taking an interest in employees’ futures, businesses help further reduce stress by helping create long-term security for employees as well as making those people feel like their place of work cares about their needs. This, once again, leads to a more positive workplace and a more productive one.
It’s an investment in employees and one of the biggest benefits an employer can provide. By showing an interest in employees and their financial education, businesses can improve not just their employees, but themselves as well. Implementing a financial education plan helps the employees by reducing financial stress which, in turn, increases workplace morale and productivity as well as contributing to a positive culture. It’s a very important aspect of business and allows employers to meet with their employees on a more personal level to improve matters for all.