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Welcome
Do you feel like you’re spending too much of your time handling employee engagement issues?
Have you been involved in conversations asking “what more can we do to attract and retain good people?”
Perhaps you’d just like to witness higher productivity among your existing people?
As you know all too well, what happens in the personal life of your employees affects how effective they are at work. This is one of the key premises of Employee Assistance Programs.
However, what has not been well understood or addressed by employers is the impact of financial stress on your workforce.
Financial stress costs you more than you think
A staggering 20 percent of Australians experience out of control financial situations, as revealed in the ANZ Survey of Adult Financial Literacy in Australia, 2005.
Further, detailed research from the USA found that “approximately 15 percent of workers...are currently experiencing stress from poor financial behaviours to the extent that it negatively impacts their productivity”. (Garman, Leech & Grable, 1996).
Financial stress among your employees is costing you in:
- Reduced productivity through distraction
- Increased absenteeism as people take time off work to deal with their finances
- Higher wages as people demand more in an attempt to solve their financial stress
- Increased turnover as people change jobs to chase the higher wages they feel they need
This cost permeates your organisation as other employees spend more time managing the financial stressed and dealing with increased recruitment needs.
Higher wages is not the answer
In our experience, most people try to solve their financial stress problem with a blunt instrument: a higher salary. But that is like attempting to extinguish a fire with petrol.
People’s financial stress is caused by poor financial behaviours and poor financial literacy.
If you add a higher income then you just increase the magnitude of the problem.
Remove their financial stress
You can reduce your people’s financial stress by improving their personal financial management and by helping them become independently wealthy. This will help them feel more secure and enable them to have a better lifestyle, which is ultimately what they want.
Investing in a Workplace Financial Education will improve the financial literacy of your people, thereby increasing their financial security and reducing their financial stress.
This is different to the financial seminars you've seen before
You've probably already been exposed to financial seminars in the workplace, and not been overly impressed. For example you may have seen:
- Seminars run by a representative of your Employer Superannuation fund
- "Free" seminars run by the local (well-meaning) Financial Planner that bogged everyone down in heavy content, bored people and then included a bit of a sales pitch to go and see them for financial advice.
Neither of those above solutions deliver a return-on-investment to you, the employer. Yet they cost you in employee down time. They don't work for you because the interests of the party delivering the education are not aligned with your interests as an employer.
The employer superannuation fund is motivated by increasing the amount invested in their funds. So that is all they talk about, rather than actually empowering your people and removing their financial stress.
The well-meaning local Financial Planner is a skilled adviser with providing advice as their primary business. So they need to get advice clients to make investing their time in the "free" seminar worthwhile. Consequently their presentation focuses on some "sexy" strategies that will entice people to book an appointment.
A comprehensive Workplace Financial Education program is different to the above examples. It educates people about what they NEED to know, not what they think they want to know. It is what people don't know they need that is causing their ongoing financial stress.
A comprehensive Workplace Financial Education program focuses on educating people to remove their pain. It is all about improving the situation of the individuals attending the program, rather than improving the situation of the people delivering the program.
And as the research shows, by improving the situation of the employees the situation of the employer improves.
Employee financial education pays for itself
Education and empowering your employees costs you far less than it costs you in higher wages in response to their demands. Higher wages continue and compound each year, whereas education results in sustained improvement.
There is a considerable body of research from the United States of America quantifying the potential benefits of personal financial education for employees. The following quote summarises the potential benefit of a comprehensive program:
“Research shows that the first-year return on investment for financial education that improves a worker's personal financial behaviour and wellness is over $400 (per employee)...Other analysis shows that employers gain a return on investment of 300 percent or more.” (Garman, 1998)
What makes FINDRE different?
What makes us different is that we focus on education not selling personal advice or investment products. We are skilled, exciting educators blended with strong technical knowledge. Our interests are aligned with yours because it is you, not the employee who rewards us for our time and expertise.
Read comments from our education clients
How to improve your employee’s financial literacy
We provide a number of resources to help you improve the financial literacy of your work force.
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Matt Hern trades as FINDRE
(Empowered Wealth Pty Ltd t/as)
ABN: 21 592 525 720
Phone: 08 9467 7320, Fax: 08 9463 7848
PO Box 80, Victoria Park, WA 6979, Australia
Website: www.MattHern.com.au
Blog: www.Money-Guide.com.au
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