Why employers should teach their employees financial literacy and how to get started
Young mom sitting with her daughter while working from home

For many Canadians, money worries are the number one source of stress. This means people are more worried about paying a bill on time than getting sick! Yikes. But it’s no one’s fault, since education around money isn’t usually taught in schools and there’s an overwhelming amount of information elsewhere. Figuring out how to get started and where to find trustworthy information can be tricky.

Thankfully, this is where employers can help. Investing in your employees’ well-being makes business sense. Here are some of the top reasons why your organization needs an employee financial literacy program.

What is employee financial literacy?

The definition of financial wellness is “the degree of knowledge for making smart decisions about money.” While it sounds simple in theory, it takes some time to figure out how to manage money. Once employees learn best practices and ways to get started, they’ll be more confident in their bank accounts. Cha-ching!

Why is financial literacy important in the workplace?

Financial literacy in the workplace is important for many reasons, but how it affects employee well-being is at the top. In fact, 43% of workers say their performance at work is suffering because they’re worried about their finances. And equally as concerning, one-third of Canadians believe they have too much debt. These facts alone, show that employees need help managing their finances.

It should be no surprise that worrying about money affects workplace productivity. It impacts employees’ physical and mental health and their workplace productivity. And this often results in more sick days, prolonged time off work, and higher healthcare costs. For example, employees dealing with financial concerns are four times as likely to suffer from sleep problems and other illnesses. How can anyone concentrate in a meeting when all they can think about is the mountain of bills that need to be paid? By solving stress at the source, all other areas of life will improve. It’s easy to say “don’t worry” but it’s another thing to put into practice.

What are the benefits of employee financial literacy?

There are countless benefits of implementing an employee financial literacy program. As an employer, you’re focused on results. So, you may be asking “what can financial literacy do for your business?” Well, acknowledging and addressing ways to help your employees’ financial knowledge, will most likely result in a more productive and engaged workforce. By empowering your team with valuable skills and knowledge, they’ll feel more confident with their money which ultimately, will improve their overall health.

Here are some (of the many) benefits of improving financial literacy:

  • Reduced stress
  • Reduced healthcare costs
  • Reduced sick days
  • Increased focus, productivity, and job satisfaction
  • Increased employee retention and loyalty (less turnover)
  • Improved morale
  • Increased business success

The consequences of not having a financial wellness program could cost you thousands of dollars per employee. The good news is you can start now with even a few small initiatives that will be sure to make a difference.

How to start an employee financial literacy program

No two organizations’ financial literacy programs will look the same (and that’s a good thing). There’s no right or wrong way to format the program – the possibilities are endless. But to truly be successful, you need to focus primarily on the needs of employees. Ask them what they want the program to include. From there, consider the size of your organization, the demographics, and your team’s capacity; see how the program takes shape.

It's important to remember, your employees learn in different ways. First, consider using a variety of formats and resources that are easily accessible and engaging for everyone. Then brainstorm topics that will resonate with your team. When you start mapping out your program, try to aim for a good balance of valuable content and unbiased expertise.

Examples of financial literacy program formats and offers:

  • Financial counselling from experts
  • Lunch and learns or webinars
  • Programs through an EAP (employee assistance program)
  • Financial health checks
  • Company RRSP matching
  • Fitness, meal delivery, and other well-being partnerships
  • Home and auto insurance discounts

Did you know? Total rewards are an easy way to help your employees save money on everyday items. Discounts for the home and transportation costs (which are the top two most expensive bills for most Canadians) go a long way. Learn why a group insurance program is a win-win for employers and employees.

Another thing to keep in mind is the average demographic of your workforce. If you have a lot of Gen Z and Millennial employees, you may want to cover topics like first-time home buying and paying off student debt. Or if you have more Baby Boomers and Gen X teammates, content about saving for retirement might be more beneficial for them. Asking your team what they’d like to see included in the program will go a long way. But ultimately, the needs of your team are unique, which is why it’s not a one-size-fits-all approach.

Examples of topics you can cover:

  • What you need to know about a registered retirement savings plan
  • How to set up a budget
  • How to manage debt
  • How to build an emergency fund
  • How to stick to your financial goals
  • Getting ready for retirement
  • Preparing a will

It’s clear that employees need guidance on understanding and managing their finances. And employers are in a unique position to both help their teams and overall business thrive. Employees learn life-changing skills while organizations build trust and credibility. It’s a win-win for everyone. Investing in a financial wellness program is a must for business success. After all, you’re only as good as the sum of your parts.

Looking to enhance your company’s total rewards offering with group home and auto insurance?