For many employers, the road to organizational success boils down to a simple formula: create a plan, hire top talent to help execute it, and then fine-tune future plans for even greater success. But how do you go about attracting – and more importantly, retaining – this talent?
Financial training for employees is a great way to help your company become the most attractive place to work.
Aside from making sure you retain talent, investing in your employees' financial literacy will get you results you just can't deny.
The benefits of financial training for employees
We'll break down some of the key benefits of prioritizing financial education for employees.
Improves employees' financial literacy
Finance touches every part of your business - after all, cash flow is essential, whether you are a for-profit business or a not-for-profit organization. Every department relies on finances to function, and finances affect every department.
In addition, employees also have to reckon with personal finances, which are largely determined by their salary. And salaries affect employee retention;around half of the workforcesay they would leave their current employer to do the same job for a better salary.
So teach them how to optimize their spending with financeTraining designed for everyonewill surely increase your retention rates because they know you value their work and want them to make the most of their money.
Optimizes business processes and communication
One thing that delays business processes, and communication in particular, is confusion.
It's harder to get started right away when people you work with use terms you don't understand. It can slow down processes as people have to go through explanations before they can become productive.
To streamline these processes, you should train your employees. If they know common finance terms, acronyms and processes, they can talk about them and complete relevant processes much faster.
For example, a process that could be streamlined would be querying payslips. With the right knowledge, UK-based employees could jump right into a discussion about the state pension system, and American employees will feel safe asking about Medicare insurance payments and Social Security. This would result in less time being spent clarifying terms and asking basic questions before getting to the bottom of questions.
Reduces fraud and financial abuse
Scammers rely on surprising their victims - which is why financial training is the perfect ammunition against their scam attempts.
You can use employee financial training to educate everyone in your organization about both the dangers of scammers and the common tactics they can use to protect themselves and your organization. This makes it much harder for them to fall victim to a scam.
And with the FTC receptionover 2 million fraud reportsIn 2020 alone, this is a very important protection.
A similar rule applies to financial abuse. For example, an employee who is struggling to have enough money for groceries at the end of the month because of overspending in the previous weeks needs to learn how to better manage their finances. Financial literacy helps them control their spending and avoid debt.
Increases employee retention and engagement
We mentioned that increasing employee retention through financial training is a viable strategy. But what about the engagement?
As it turns out,77% of Americans worry regularlyabout their financial situation, which makes up a significant part of the workforce. And of course, anxious employees will have a harder time engaging productively with their work.
By investing in the financial education of your employees, you can help alleviate their concerns. This makes it much easier for them to give their all at work because they don't have to worry as much about their financial problems.
Plus, it doesn't hurt that less stress makes for happier employees who don't crave the kind of life change that finding a new job brings. Numbers also prove it. 68% of employees arerather stay longerat their current place of work if their employer offers them financial wellness benefits.
4 types of financial training
Now that we've established why you should invest in financial education for your employees, it's time to look at the practical side of things. What does financial training actually look like?
1. Financial Education and Analysis
Your employees may be wondering how useful financial analysis could be for them, but it can be incredibly useful, especially when you're looking to save some money on a personal level.
With a solid foundation in financial literacy and analysis, employees can develop their budgeting and financial planning skills. This increases their overall happiness while also ensuring they are better prepared for whatever the future might throw at them.
An example of financial literacy training would be seminars covering common financial terms. These would aim to help employees look at financial documents and know what they are dealing with.
This training aims to improve employees' general understanding of corporate finance. It is also designed to help employees learn to analyze their own finances.
2. Tax Compliance
When it comes to financial education for employees, few things are more important than tax compliance.
Depending on where you are, taxes can be relatively simple... or very, very complicated. This is even more true if you have recently moved to a new country or are unfamiliar with itself-assessment tax returnor tax laws in general.
This is why tax compliance training is crucial.
Employees who have (or want to have) outside employment can particularly benefit from this type of training. For example, UK-based employees could learn how to use tax filing software to run their business, or you could provide those working in the US with information on how to do thisIRStax the self-employed.
with around36% of Americansdescribe themselves as “self-employed workers” engaged in sideline activities; andone in five BritonsHaving started a part-time job since March 2020, this is important information to arm your workforce with.
3. Industry specific training
Each industry is unique in its needs and requirements, as well as the skills that its employees must master. Finance is no exception, which is why industry-specific finance training for employees could be just what you need.
For example, industry-specific financial training can cover topics such as industry standards, advice for those on flexible contracts, or details of how commissions work.
Especially the latter deserves a lot of attention.
When employees earn bonuses and even salaries through commissions, they need as much knowledge as possible about the ins and outs of those commissions. How much can they earn before being taxed more heavily? If they are taxed how much do they have to pay to HMRC or IRS? Which items or services bring higher commissions and why?
These are just some of the questions your training needs to answer in order for them to do their jobs effectively.
4. Leadership and Management
Leaders in your organization need to be able to help their departments or teams succeed. Training is always a great way to help with that, and that includes bothWellness training for employeesand the kind that focuses more on finance.
Executives often need to manage budgets for their teams or departments. With the right training, they can learn to use every part of their budget for maximum impact, so every employee has what they need to achieve great results.
You also need to know how to use the tools your organization relies on for management. For example, managers who know how to use cloud HR software to manage training, goals, and employee performance for their teams will bring a lot of value to your organization, including financial value. That's because they're making full use of their teams and financial assets.
Financial training for employees is directly helpful for both your company and its employees.
In addition to helping your company optimize its financial performance, employee financial education is great for increasing employee retention. That's because it differentiates your company from the competition while also teaching employees how to get the most out of their salary.
In a word, it is universally useful. It is therefore worth investing in employee financial training.
About the author:
Kelly Dent is Global Content Editor atTax filing software Sage. She has a decade of experience writing and editing content for a wide range of audiences and media, from PR and editorial articles to social media and podcast production. Specializing in technical and business content, she is the co-producer of Sage's award-winning small business podcast, Sound Advice.
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