Why HR Departments Should Aid in Improving an Employee's Financial Literacy

According to a survey commissioned by digital bank Pepper, 9 out of 10 people in the UK admit that they are undereducated when it comes to personal finance. While this primarily affects an individual's personal life, financial illiteracy also has far-reaching implications that affect the organization an individual works for.

HR departments should focus on improving the holistic wellbeing of everyone in the company ⁠— and this includes the financial wellbeing of their employees.

In this post, let's take a look at the reasons why HR departments should help employees improve their financial literacy, and how they could do this.

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3 Benefits of Helping an Employee Improve Their Financial Literacy

Financial literacy can help lower employee stre
Your employees may already feel stressed from dealing with their daily lives and workloads ⁠— and you don't want to add to this by letting them stress over their finances.

If you fail to help workers manage their stress, it may manifest in worrying physical symptoms such as sleep problems, high blood pressure, and migraines.

By helping employees feel more secure about their finances, you can lower the stress they experience and allow them to take better care of their bodies.

Financial literacy can make employees more productive
Of course, your employees will be more productive when they're not preoccupied with money woes. Salary Finance confirms this, as they note that financially troubled employees are four times more likely to have their worries affect the quality of their work and five times more likely to miss deadlines.

So in order to avoid an unproductive workforce, you should help employees better manage their finances.

Financial literacy increases employee retention rate
Many employees highly value the wellness programs provided by their employers. By having a great financial wellness program, you can show your employees that you truly care about them and that you're keen on investing in their well-being.

This, then, encourages workers to stay with your organization and have a more active hand in helping your company achieve its goals.

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How to Help an Employee Improve Their Financial Literacy

Ask them to take a financial self-assessment test
Through this, you can gauge the financial literacy of an employee and force them to take a hard look at their finances. Most people find it difficult to plan their finances because they don't spend a lot of time thinking about it.

So by taking a financial self-assessment test, workers can better understand their current financial situation and eventually build their financial confidence. The Financial Times and The Money Advice Service both have free financial quizzes that you can let employees take.

Encourage them to invest
In order to help employees secure their finances down the line, it'll do them well to get started with investing. In addition, investing can motivate employees to learn more about the world of economics and personal finance, as they need to know the ins and outs of various financial markets if they want their investments to grow and prosper.

Thankfully, there has never been an easier time to invest in areas like Forex, indices, commodities and crypto than now, as FXCM states that all you really need to get started with trading is signing up to your chosen platform and depositing your initial funds.

By inspiring employees to get started with investing, you can encourage them to dedicate time learning about their finances and help them find financial success in the future.

Teach them how to use financial planning tools
As a part of your financial wellness program, you can teach employees to use various financial tools on their phones and computers such as budgeting apps, debt tracking software, and tax preparation software.

By mastering these programs, employees can have an easier time managing their personal finances and eventually expand their financial knowledge.

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