59% of UK employees say current financial worries prevent them performing their best. The significance of financial literacy has transcended personal finance and extended its reach into the workplace. Creating a financially literate workforce isn’t just a forward-thinking strategy; it’s a powerful investment that yields benefits for both employees and the organisation as a whole. While 89% of employers agree financial concerns have an impact on staff performance, there’s still much more to be done to improve financial security in the workplace.
This blog delves into the compelling reasons why fostering a financially literate workplace is paramount in today’s business environment, benefitting both your employees and organisation’s overall success.
Why is financial literacy so low?
As of 2021, 24 million UK adults lack confidence in managing their money, with those most likely to feel worried when thinking about money being young people aged 18 to 34 years (50%). Unsurprisingly, this high number is largely down to the fact that, well, people don’t really know where to start.
Let’s look at the facts: are adults in the UK set up to fail financially?
A lack of financial education in school only has a domino effect. With 44% of credit card holders lacking the knowledge to use it effectively, these people are prone to monetary misuse and financial panic. Unless something is done about it, these problems will persist.
It’s more important than ever that we address this. Since the beginning of the cost of living crisis, ⅓ of Brits have reported that they’re living paycheck to paycheck. While this often isn’t down to a lack of financial planning on the individual’s behalf, there’s no doubt that improved financial education is beneficial in the long run. Without sufficient knowledge on the necessary tools and resources to manage our finances effectively, people consequently struggle to forecast, budget, and organise emergency funds.
There’s no single-solution to resolve financial stress in the workforce. However, starting out with a focus on fostering financial literacy is a fundamental place to start.
How can I foster financial literacy in the workplace?
1 – Payroll transparency.
At the heart of building a financially literate workforce lies the essential concept of payroll transparency. It acts as the pivotal initial stride towards empowering individuals with the insights required to navigate their financial journey effectively. Having a comprehensive view of one’s payroll lays the groundwork for informed decision-making and responsible financial choices. 2
2 – Payroll software.
To make full pay transparency possible, your workforce requires robust payroll software. These systems can provide employees with payroll reporting & analytics, giving your teams absolute and real time visibility of their monetary situation. A comprehensive view of their payroll data provides a sense of predictability and security, fostering more effective decision-making and financial planning.
3 – Financial education lessons & programmes.
Finally, take advantage of free financial literacy resources and use these to help educate your workforce. Access to comprehensive financial education equips them with the knowledge and tools needed to make informed choices. These programs not only bolster employees’ personal financial management skills but also contribute to reducing financial stress, which can often spill over into work-related concerns.
What are the benefits?
1 – An empowered workforce is a threat to competition.
With access to full payroll transparency through software, alongside the correct education on using these tools effectively, your workforce can enjoy their newfound sense of financial security and empowerment. Simply through improving financial literacy, you’re enhancing growth, resilience, and confidence amongst your employees, creating a (work)force to be reckoned with to competitors.
2 – Reduced stress levels.
Finances are stressful. What’s more stressful is not knowing what to do with them. Financial education is a component of overall wellness. This, in turn, leads to improved mental and emotional well-being. Ultimately, such education brings more motivation, productivity, and employee satisfaction.
3 – Improved status as an employer.
Employees appreciate employers who care about their overall development, contributing to a positive workplace atmosphere. Just as companies offer health and wellness programs, providing financial education demonstrates a holistic approach to employee well-being. Your commitment to their wellbeing fosters a sense of loyalty and satisfaction, leading to higher retention rates and company reputation.
The era of compartmentalising financial education in the workplace has passed. Today’s businesses thrive on informed decisions, a motivated workforce, and a culture that prioritises overall wellbeing. By fostering a financially literate workplace, organisations don’t just check a box; they embark on a journey of empowerment, growth, and collective prosperity. It’s a journey that leads to more secure financial futures, smarter decisions, and a stronger sense of community within the workplace. Your workforce will look up to you as an employer who cares for and nurtures their employees, something we mustn’t underestimate the value of in today’s world of work.