Globally, people are becoming worried about their financial situation—and for good reason.
Inflation and the stress on supply chains are currently driving costs through the roof. Wages are barely keeping pace either. The global cost of living crisis isn’t going away anytime soon, and a lot of people, possibly even your employees, are struggling financially. And when employees are financially stressed, it affects their job performance and productivity.
Many employees have too many months at the end of their money but lack the skills to make the most of their finances. That’s bad news for everyone involved. Employers can change that.
Benefits of Having Financially Empowered Employees
Employers are realizing the importance of financial wellness to the well-being of their employees and even the company itself. Financial literacy is becoming increasingly important today. Thus, employers have the opportunity to help their employees become financially empowered.
Financial problems (or lack thereof) can have a huge impact on employee performance. Do you even know how debilitating financial stress can be for employees? If your employees are financially literate, then they will more likely be able to perform well due to the reduced stress in their lives. And that helps grow your mission-driven finance, too.
Here are other reasons why employees need to be financially empowered:
- Reduced financial stress. The financial problems of your staff aren’t just their problem. Financial stress creates a ripple effect that could affect the entire company. Helping your employees improve their financial literacy is a significant investment that could improve overall business efficiency, productivity, and success.
- Improved engagement and productivity. Financial stress can lead to difficulty focusing at work, increased absences, decreased morale, and health issues. So financial literacy training could improve both employee engagement and productivity in the workplace.
- Increased morale. Financial educational programs increase job satisfaction because it allows employees to know that their employer cares about them. That increases morale, which then leads to higher productivity.
- Reduced turnover. Providing employees with financial literacy training shows that your company genuinely cares about them, thus lowering the chances of them quitting their job. And so, lowering employees’ financial stress reduces the cost of talent acquisition and training time.
- Better health. Financial stress can lead to health problems, such as ulcer, insomnia and high blood pressure. Poor health directly affects employees’ performance. Thus, helping them become financially empowered promotes better health and better outputs.
With financial empowerment, employers help their team take control of their money and achieve their financial goals.
Individuals cannot control macroeconomic factors that cause financial stress. But providing your employees with financial education can help them learn how to control the things that are within their power, such as increasing savings and growing money through investment.
How to Create a Financially Empowering Company Culture
Company culture may impact the consumption, saving, and investment decisions of employees. It could even affect the financial performance and growth of the company. While empowering employees can be a difficult task, and one that’s quite tricky to measure, it’s possible to achieve.
Here are some steps you can take to financially empower your employees:
- Check-in with your leadership team to make sure everyone is on the same page with the mission and culture initiatives. Culture and empowerment always start from the top.
- Ask managers to go over the company mission and values with their respective teams.
- Create a culture of accountability. Let your team know they are always free to express their feedback, advice, and ideas. Consider setting up an efficient system for this as well, such as a Google form or suggestion box.
- Ensure that your employees have access to the benefits and resources they need to thrive in both their personal and professional lives.
A company won’t reach its full potential until all employees do.
Financial empowerment will help employees set goals, improve performance, and take on new challenges and opportunities that will positively impact their careers. Doing so can also help the company grow and spread its mission. Remember—the first step is always to listen to the needs of your people, so you’ll know what needs to be done and where to start.
Financial Skills to Inspire and Empower Employees to Become Transformational Leaders
Mission-driven employers should empower their team with the knowledge they need not just to thrive in the role they hold within the company, but also more generally in life.
Some financial skills that can help your employees include:
- Setting goals and planning for large purchases
- Saving for emergencies, bills, and goals
- Tracking and managing income and benefits
- Paying bills and other expenses
- Getting through the month
- Dealing with debt
- Understanding credit reports and scores
- Determining the right money services, cards, accounts, and loans
- Protecting and growing money
- Investing smartly
With financial security, employees become happier and healthier. It can even inspire them to be transformational leaders. Understanding finance and having the confidence to work with money is invaluable to a leader’s arsenal. Financially savvy employees understand the company more holistically and make smarter decisions.
How to Teach Your Employees Financial Skills
Money is one of the biggest stressors in a person’s life.
Fortunately, helping your employees conquer and eliminate their financial stressors is within the power of employers. Below are some ways you may empower your employees to build financial wellness and reduce stress.
Provide financial counselling
As a business owner, you are in the perfect position to help employees close the knowledge gap about their finances. Consider hosting workshops on investing, home buying, loan consolidation and any other relevant financial issues your employees might be facing.
Health issues may take a toll on finances. So a great way to help employees combat stress is to promote physical well-being. You could either provide in-office fitness centers or studios or offer gym membership reimbursements and other wellness benefits for employees. By doing so, your employees gain access to important programs and amenities they might not be able to afford.
Implement employee purchasing programs
Employee purchasing programs can allow employees to purchase items through you and pay without interest through paycheck deductions or other methods. It helps protect employees from more costly alternatives, including credit cards and loans with high-interest rates.
Offer healthcare guidance
Offering healthcare benefits reduces the financial burden on employees. You may also provide easy access and useful tools to help them track and monitor how much they should set aside for medical emergencies.
Mandate 401(k) education
Having a retirement plan option is a great way to promote financial wellness within the company. Make it a priority to make sure your employees are comfortable and satisfied with their options. Offer workshops or work with your financial advisor to offer ongoing education for employees.
Financial Empowering for Growth and Social Impact
Not having enough money to put food on the table puts so much stress on a person.
Financially empowering your employees increases their well-being, which in turn increases productivity and morale. When employees feel better, they do better—and so does the company. Thus, a strong financial well-being strategy can transform your company and help you create social impact.
Take time to financially empower your people and reap the rewards. Book a call with a virtual CFO at Profit Reimagined to help your employees to become financially empowered.