If I came into your office and told you I could increase your company’s bottom line by making it more efficient, you might think I was trying to sell you a brand new state of the art production line, or maybe some lightning fast computers that will reduce your load time.
However, what I am proposing may come as a shock to most as it is something intangible yet it has a drastic impact on your workforce.
The answer: workforce financial literacy.
Ever since the 2008 financial crisis, it seems that everyone has money on their mind. The stock market crashed eroding millions of dollars of hard earned wealth. The year 2009 marked the highest amount of personal bankruptcies in history. As well, retiring comfortably appears to be something we only see in the movies. No wonder financial related stress has tripled since 2009!
Your employees are the most important resources your company has and they should be treated as such. If you had a top of the line sports car that you treasured; you would wash it, take it for an oil change every 5,000 kilometres, and treat it to premium gas to keep it running the most efficiently possible. Maintaining an efficient workforce also requires proper dedication; after all, they are only human.
As shocking as it might be, a little financial education goes along way. Just in case you are skeptical about this, let me prove it to you.
A little financial literacy is great for Productivity.
According to the 2012 Sun Life Financial Health index, financial stress was the number one stressor among survey respondents. Stress has been proven to cost Canadian companies up to $33 billion dollars a year as stressed employees tend to be less productive due to fatigue, decreased engagement and loss of focus. To make matters worse, many people that are dealing with financial issues cannot keep it away from the workplace and end up using company time to deal with their own problems, which evidently is hampering a company’s ability to make “money”. A company must take matters into its own hands and proactively address this issue. Plenty of evidence has shown that if employers don’t offer financial literacy training, many employees won’t bother seeking it out on their own, thus continuing a vicious cycle.
Did you say less sick days!?
Stress has been shown in many instances to be linked to countless health related issues and with health problems comes the use of an increasing number of sick days. With increased absenteeism, a company’s ability to effectively leverage its workforce diminishes as client service, knowledge transfer and team projects suffer. Studies show that 83% of short-term disability claims and 85% of long-term disability claims in Canada are due to mental health issues. Many of these are stress related. Other than absenteeism, in some instances personal finance problems have been linked to depression, substance abuse and even addictions. Looks like an issue worth tackling!
A More Committed Workforce.
Despite all the productivity gains, some employers may still be reluctant to implement a financial literacy program. Nevertheless, there exists one more convincing reason to do it; your employees are likely to be happier to work for you. This may not seem like much, however when you have a happy workforce that enjoys working for their employer, retention rates are higher and positive word of mouth spreads to attract high quality new recruits. Research has shown that 9 out of 10 employees want their company to provide a financial literacy program. When companies offer this benefit, employees associate their firm as being the one to have helped them fix their financial affairs, thus leading to an increased satisfaction and commitment to their employer.
It comes as no surprise that the top reason some employers do not provide financial education to their employees is due to cost. However, most studies show that the expense of running a program can be quickly recovered by the productivity gains and cost savings over the long run. With an aging workforce that includes many individuals preparing for their retirement, proper financial planning is a necessity. It is time that employers re-think their corporate benefits to include a strategy that will not only feel like a socially responsible choice but will evidently boost the bottom line.