Having a financially savvy workforce in the 21st century has proven to be one of the significant indicators of personal and organizational growth. Considering this, financial literacy refers to the ability to understand and apply financial skills in making an informed budget, investment, and financial management decisions for the short and long term.
Corporate leadership and employees should work together to achieve financial literacy within the corporate structure. The importance of financial literacy cannot be overemphasized.
This is because financially literate employees are better equipped to make informed decisions about issues related to investment opportunities, efficient resource allocation, budgeting, and a host of others which affect them behaviorally.
As a result, employers benefit immensely because of aligned decisions with corporate vision, mission, and goals. Furthermore, a financially skilled workforce results in workplace stability, thereby increasing employee ability to contribute to corporate success on a short- and long-term basis.
Strategies for enhancing financially literate workforce.
Employers can enhance the financial literacy of their workforce in several ways. Some of these are:
Collaborative Environment for Learning
Creating an environment where employees can collaborate and learn dynamically is a step in the right direction. This is helpful as employees can share their knowledge, skills, and experience in terms of how to make informed financial decisions without undermining their personal goals as well as organizational objectives. For instance, in an organization committed to hosting regular financial literacy workshops, employees from different departments and segments of the organization can share insights on efficient budget management and optimizing resource allocation. This dynamic approach encourages learning and instills a culture of working towards achieving a common goal in the employees’ minds.
Enrolling Employees in training
Employers can also take the initiative of enrolling their employees in training programs, one-on-one coaching sessions and resources that shed light on the importance and practicality of financial literacy. Businesses that prioritize investment in human capital benefit immensely in terms of better service delivery and job satisfaction of the employees. Employees who are more financially literate are most likely to experience reduced financial stress, leading to increased job satisfaction and productivity, thereby making them better equipped to make wise and informed financial decisions for themselves and the company they work for.
Imbibing Financial literacy in corporate culture
Weaving financial literacy into corporate culture is poised to yield immense results in ensuring that employees understand the impact of financial decisions they make and how to mitigate against risk. This involves reading books on finance, attending workshops, and engaging in online courses to ensure employees stay informed about financial concepts and strategies.
Building trust and accountability
Organizations can build trust and accountability in the hearts of their employees by ensuring transparency and accountability are practiced in sharing information about compensation or payroll. This helps employees become aware of their financial value within the workforce. For example, an organization that offers insights into factors considered when determining compensation will help employees gain clarity of their financial value within the workforce, thereby fostering trust and accountability.
To adopt the above strategies, organizations may face a couple of obstacles relating to inequality in financial knowledge, financial inclusion challenges, limited access to financial education, and the inability to assess the efficacy of financial literacy programs on employees.
Business leaders should communicate these strategies to employees to gain acceptance and mitigate resistance. Encouraging, promoting and incentifying the habit of continuous learning in terms of financial literacy amongst employees will help ensure they are conversant with current financial events, which becomes beneficial for themselves and the organizations.
Furthermore, businesses can adopt a streamlined financial program that suits and addresses the financial needs of employees and emphasizes the need to implement these strategies.
Developing a financially literate workforce is a worthwhile investment with economic value. It improves decision-making, promotes stability, connects the staff with the company’s culture and goals, and sets up the organization for long-term success.
Abdulsamod Balogun leads Communications and Public Relations at Leonine Investment Services Limited. He's excited about new media, technology and public policy. When he's not working, he's catching up on movies and books.