As a small business owner, you want to bring out the best in your employees. To help cement loyalty and reduce turnover, you will also want the best for your employees. One way to help you get both is by offering access to financial education.
A 2018 survey by Willis Towers Watson showed that employees with money concerns are less productive than their financially non-stressed peers (32% vs. 5%). If even half of your team is distracted by financial worries, your business is losing a lot of productivity.
You can help keep everyone on track and do your employees a solid favor by incorporating regular financial education into your calendar. A class or two each quarter might be enough to help employees get a leg up without negatively impacting productivity even further. Here are six ideas you can put to work for your small business.
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1. Leverage Your Existing Benefits Package
Small business owners have to watch every penny coming in and going out. However, employee benefits are one area where scrimping does not pay off in the long run. Good benefits attract top talent, and providing the right ones will help you retain the staff you already have. Offering a health savings account or setting up a small business 401(k) plan can help employees better manage their money.
In many instances, the companies that provide these benefits will include access to financial advising services for your employees. These advisors may be able to help with retirement planning, insurance needs, or even financing a child’s college education. Make sure your employees are aware of the services that are already available.
It’s also important to let your staff know they won’t be penalized for the time it takes to get the financial advice they need. Otherwise, they may feel pressured to skip out on acquiring beneficial information to meet some more immediate deadline or demand.
2. Provide Regular Education Opportunities
Setting up periodic education opportunities is another way to motivate your employees to get the financial knowledge they need. Consider setting aside a half-day every month or two to bring in a local financial expert to discuss a specific topic and answer questions.
Making sure managers allow their staff to participate without penalty will be critical. Schedule these events to minimize interruptions to workflow and maximize attendance.
If you want to go the extra mile, send out staff surveys before you schedule any education sessions. This will help you discover which topics your employees think would be most helpful. Survey results may prompt you to offer specific sessions for certain demographics and give you the needed insight to schedule them accordingly. Responses could even uncover a need for emergency, one-on-one assistance that might have gone unnoticed otherwise.
3. Establish Local Partnerships
Small businesses won’t have the budget to afford the same level of resources as their larger counterparts, but that doesn’t have to be negative. One way to flip it into the plus column would be to partner with another local small business that specializes in financial services. With a little creative brainstorming, you might even be able to come up with a mutually beneficial arrangement.
For example, you might agree to consistently refer employees to a financial services partner in exchange for a reduced fee structure or “first meeting free” incentive. Your company might even be able to reciprocate, depending on the type of product or service you provide. By seeking out such opportunities, you’re not just helping your employees financially, but also strengthening your local business community.
4. Create or Strengthen In-House HR Resources
Some smaller companies are adding financial expertise to their human resources staff. These HR positions are being created to help employees better manage their income and assets. The people who fill these roles aren’t personal financial advisors per se, but they can help employees make wiser financial decisions.
Having an HR team with built-in financial advisory capabilities sends a strong message to your employees that you care about their well-being. Someone close at hand who has financial training can be an invaluable resource when an employee needs to make tough financial decisions.
This person could help coach an employee considering withdrawing money prematurely from a retirement account or seeking a loan. Knowing that someone within the company can provide informed answers to their financial questions will increase employees’ confidence and security.
5. Provide Access to Online Financial Planning Courses
If you find disparate gaps in financial knowledge across your team, your company may need to implement a more personalized solution. Providing one-on-one advising for each employee would quickly become overwhelming, though, even in a smaller company. Offering access to online courses, either created in house or sourced elsewhere, could be the perfect solution.
These self-paced classes can meet an employee’s individual needs without taking up a lot of company resources. Depending on licensing agreements, such e-learning opportunities could be linked with other employee resources and made available to all.
Look for solutions that group courses by topic, such as budgeting, credit management, and investment. Allow employees to select the lessons they find most relevant and consider incentivizing completion of various modules.
6. Do More With Paychecks
Financial incentives can be incredibly motivating. Ultimately, though, learning to better manage a regular paycheck will do more to help an employee achieve financial stability than any one-time bonus will. One way employees can better manage their paychecks is through voluntary withholding to a personal emergency fund.
In a 2018 survey, the Federal Reserve Board found that 40% of respondents said they wouldn’t be able to cover a $400 emergency expense. Had these individuals been able to set aside a percentage of their paycheck into savings, that might not be the case. Work with your payroll provider to find creative options for employees to “force” themselves to budget for the unexpected.
Incorporating financial education into the workplace is a relatively new practice for many small businesses. Initially, it may seem counterintuitive to improve productivity by adding more non-work activity to your employees’ days. However, helping your team address their financial issues and plan for the future will improve their concentration and bring greater focus to the workplace.
When your employees feel secure in their finances, they’ll be more productive. And that will set all of you up for long-term success.