Today’s employees are increasingly looking to employers for more than just a job. They want to establish a personal relationship with the company, and feel that their individual contribution is valued. Monetary rewards are important, but non-monetary rewards and recognition are low-cost tools that companies can use to build and sustain these relationships.
Employers who are expanding their employee recognition programs would do well to consider adding financial education programs to their toolbox of offerings. Many companies offer wellness programs that focus on an employees’ physical health as a way of increasing productivity, with the rationale being that a healthier employee is a more productive employee. Employers are turning their focus to employees’ financial well-being. Studies have shown that high levels of financial stress can lead to an increase in anxiety and depression. In turn, this can lower productivity and focus in the workplace. For employers, this decrease in focus can lead to workplace accidents, costly mistakes in the production process, or poor customer service.
Employers offering workshops that address financial topics can help their employees reduce stress, which could lead to a reduction in absenteeism and turnover. Many people haven’t had the opportunity to learn about credit scores, investments, and retirement planning. Having the opportunity to learn about budgeting, managing their relationship with student loan lenders or credit card companies, and how to successfully apply for a mortgage can help employees to solidify their financial positions.
In the past, employers have avoided this topic as too intrusive into the employees’ personal lives, and as risky because employers didn’t want to be seen as giving financial advice. However, in recent years it has become apparent that many employees could benefit from financial education. This lack of education has left many employees without the tools to improve their situation. The rising levels of student loan debt, along with historically low personal savings rates, have left many employees in tight financial circumstances.
Financial Education, Not Advice
The key for employers is to focus on financial education, and not on giving financial advice. Hosting workshops by experts on topics such as budgeting, buying a first home, or retirement planning can give employees the tools they need to move ahead with their own financial planning. The knowledge gained by attending these workshops can help employees determine how they want to move forward, and what their goals will be. Each employee’s financial situation will be different, so it is important that these workshops provide enough general information for employees to use, but not so specific that it crosses the line to financial advice. Highlighting free available tools, such as Mint, can guide employees to resources available to them online, or through certified financial advisors.
As part of the financial education program, employers can highlight the other benefit programs that they offer, such as a company 401k plan, short-term disability plan, or long-term disability plan. If the employees view the application process as too complicated, they are less likely to utilize the benefit. Making the Human Resources staff available to answer questions and provide guidance in completing the applications or plan documents can lead to increased use of these benefits.
Employee Support Groups
Another option that an employer might consider would be to offer support groups for employees. Groups for single parents, employees looking to retire in the next 5 years, or first-time home buyers can allow employees to share encouragement and knowledge amongst themselves.
By providing employees with the knowledge of how they can better their financial situation, employers are empowering their employees. In turn, these employees are likely to provide better attention and service to their employer.