How building your employees’ financial confidence shows you care
21 July 2020 at 7:00 am
Lali Wiratunga, national manager of Westpac’s financial education experts, the Davidson Institute, shares some tips to better understand the importance of improving your employees’ financial confidence and where help is available.
COVID-19 has challenged the Australian community sector and its employees in ways never seen before. The organisational impact of the pandemic is significant. Since the crisis began, employees of community organisations have responded to business continuity plans, converted to being remote workforces, navigated changes to their employment situation and helped their organisations to pivot, respond and adapt. All this whilst ensuring their community organisation can fulfill its mission. A community organisation’s employees really are their most important asset. Leading organisations are implementing financial literacy strategies to help their employees. So here are some tips to help you better understand the importance of improving your employees’ financial confidence.
1. Start with why – employee financial confidence is important.
Actions matter. What you do to help your employees, will be remembered as part of your employer brand for many years to come.
As mission-orientated organisations, that help people and communities, the wellbeing of your employees in all facets of their lives – including financial matters – is important. Many different factors can influence the happiness of employees, with many workplace initiatives available to employers wanting to improve productivity and in turn profitability.
Financial wellness is now more important to Australian employees than ever. Prior to COVID-19, wage growth had slowed as the cost of living and the level of personal indebtedness were rising. Since COVID-19, some employees in the sector have faced a loss of income due to reduced hours or redundancies. For other employees, whilst their own job may not have been affected, their family income may have been reduced due to a change in their partner’s employment situation.
The simple fact is that many employees find it hard to plan and manage their finances. Many of them are plagued by questions: How do I budget? What steps should I take to get out of debt? How can I prepare for retirement? Where do I start?
Financial literacy is the key to responding to these questions.
2. Delve deeper into the benefits case.
Being serious about helping your employees to build their financial confidence, can set your community organisation apart and go some way to helping you become regarded as an “employer of choice”.
The benefits case includes:
- Attracting and retaining talent. Being proactive about helping your employees to improve their financial confidence helps their own wellbeing and demonstrates care. The resulting impact of an increase in employee satisfaction and retention may have a transformative effect on the work environment in the long term.
- Helping your employees build their financial confidence at each life stage. Financial literacy is the ability to understand and properly apply financial management skills. Effective planning, properly managing debt, budgeting accurately, calculating interest, and understanding the time value of money are characteristics of being financially literate. Training in these areas gives employees the skills they need to take control of their financial lives.
- Improved decision-making for your community organisation. Financial literacy training, on themes beyond personal finance, such as the fundamentals of cash flow management, can also benefit your community organisation, as employees learn important financial management principles.
Embracing the concept of helping your employees’ financial wellbeing can benefit your organisation in terms of higher levels of productivity, improved staff advocacy and retention.
3. Putting financial wellbeing on your organisation’s agenda.
So, what strategies can you deploy as a community organisation to help improve your employees’ financial confidence?
- Understanding. This involves recognising that the financial situation, saving, spending and financial goals will vary across employees. The impact of an event such as a partner losing their job due to COVID-19 structural changes can affect a stable financial situation quickly. Employees’ common needs and wants can be catered for and communications created to help them as cohorts.
- Financial education. Financial confidence to make effective decisions and help your employees to take control of their finances can be improved through clear and accessible financial education. Westpac’s Davidson Institute is an online resource centre available to help you to help your employees on their financial journey. Here they can access financial education on a range of money management topics to better understand their options and improve their financial decision-making skills. There are resources in a range of learning formats, so your employees can learn about the topics that interest them, whether it’s budgeting, managing debt or planning for their future. Also, there are a range of resources to help your employees to better understand key financial management concepts such as measuring financial performance and managing cash flow in a practical format to follow.
- Start a conversation. Strong networks in organisations present opportunities to use existing open lines of communication to start a conversation about financial wellness. There may be existing interest in financial wellbeing matters amongst certain staff members, who could be encouraged to be financial wellbeing champions. Financial wellness guides or links to the Davidson Institute can be shared by these financial wellbeing champions with their colleagues, so all your employees can learn to build better money habits.
Success in financial life comes down to financial confidence and good money habits. Will they set a person up for success, or not? The good news for Australia’s community sector is your employees have the choice and power to build their financial confidence and change their money habits forever. No matter where they are on their financial journey, Westpac’s Davidson Institute is here to help them.
This article was written by Lali Wiratunga, national manager of Westpac’s Davidson Institute.
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice.