If you’re running a company that wants to grow their earnings, I have a simple message for you:
Take care of your employees’ financial health.
No, I’m not suggesting tossing out blanket raises – unless they’re underpaid of course. Throwing money at your staff won’t necessarily solve underlying financial wellness issues. Ask any lottery winner – 70% of whom lose all their winnings due to poor financial decisions.
I am however, suggesting that you help employees help themselves by giving them the support to manage one of their most important asset – their money. You can do this by simply running (the right) financial education workshops.
There’s plenty of evidence showing that employee wellness programs, including financial wellness programs, are directly linked to company profitability.
For instance, a study conducted by Harvard Business Review found that companies that invested in wellness programs saw an average return on investment (ROI) of $2.71 for every dollar spent on the program.
Financial workshops, specifically, have been linked to increased profitability.
A study conducted by the International Foundation of Employee Benefit Plans found that organizations that offered financial education coupled with counseling saw a 10% increase in productivity and a 5% increase in profitability.
Money challenges are the leading cause of stress for people globally.
According to PWC, among financially-stressed employees, 49% said that money worries had a severe or major impact on their mental health, compared to just 15% of employees not stressed by their finances. And yet, very few people are taught the financial knowledge and skills to confidently make personalized financial decisions.
We are all well aware of the knock-on effect stress has on us:
- lack of motivation
- poor physical health
- relationship problem
- and even crime
PWC’s 2022 Employee Financial Wellness Survey showed that of those who said money worries severely impacted their mental stress:
- 41% say their productivity at work has been impacted
- 35% say their attendance at work was affected
- 69% said they felt less engaged and less valued at work
For any company, the cost of lost productivity and higher health benefit expenses should be a wake-up call.
And let’s not forget the high cost of employee turnover, including recruiting and training plus the loss of institutional knowledge this can lead to. Among those employees currently looking for a new job, 65% cite money as their primary reason.
For organizations, offering financial workshops is a valuable employee benefit that can help attract and retain top talent, and build greater job satisfaction and loyalty.
Financially literate employees are more likely to understand the financial implications of their work and make decisions that positively impact your organization’s bottom line.
For example, they may be more likely to identify cost-saving opportunities, negotiate better deals with suppliers, and make smart investment decisions.
One study published in the Journal of Corporate Finance found that companies with financially literate boards of directors had higher profitability, return on assets, and return on equity compared to companies with less financially literate boards.
Do I have you sold on the importance of financial education? I hope that’s a resounding YES!
The next steps are to ensure your financial literacy workshops and overall program are set up correctly. I have seen far too many mistakes and resources wasted because companies take a hasty approach with the aim of ticking off a box, rather than making an impact.
There is no one-size-fits-all workshop, or a one-and-done event. While the majority would agree that financial literacy is a life-essential skill, learning those skills can be overwhelming. But building a series of workshops that address their diverse needs can help employees set financial goals, save money, and learn how to save and invest for their future retirement.
When done right, financial workshops can also provide a safe space for employees to discuss sensitive financial topics, such as debt or retirement planning, with their peers and a qualified financial expert.
Investing in your employees will be your smartest investment.
Financially literate employees who understand how to manage their money effectively will manage yours effectively, less stressed, fully engaged, and committed to your organization.
If you’re looking to implement an employee financial wellness workshop
or would like a second opinion on your current framework, we invite you to set up a
FREE 20 minute consultation call with Saijal Patel, CEO of Saij Wealth Consulting.
Also check out our Saij Wealth Academy, a uniquely designed financial wellness program that’s
unbiased, impactful and inclusive.