GUEST POST: Digital transformation expert Laurence Smith says financial literacy programs offer some of the best productivity returns for staff wellness investments in the current Covid-19 era.
Growing up many of us were taught that it was impolite to ask people about money, how much they earned, or how much their house cost. In many ways money was a bit of a mystery, other than basic exhortations to save, save, save. We were also told that money didn’t make us happy, but that we should strive for (financial) success, but that explicit wealth was ostentatious. No wonder people are confused.
Now, fast forward to the end of 2021 and the World Economic Forum Global Risks Report has found that "Livelihood Crises" are ranked as the second highest short term risk for individuals around the world (second only to infectious diseases including Covid-19). This has been driven by inequality, lack of access to, and understanding of, work opportunities, and falling levels of digital and financial literacy.
Fact: According to the US Centre for Disease Control, mental health issues have tripled since the beginning of Covid-19.
Fact: Financial instability can exacerbate mental health issues, according to The Lancet.
Fact: Mental Health issues negatively impact employee engagement, talent attraction and
retention, organisational productivity and profitability — and your chance of becoming (or staying) an employer of choice.
Fact: The single largest driver (54%) of Mental Health issues are financial concerns.
Fact: Most employers offer no form of financial literacy training or financial wellness support, yet it is the most sought after new benefit for staff.
Fact: Employees stressed at home under-perform in the workplace. Absenteeism and
Presenteeism, driven by financial stress and concerns, account for around 1 hour of lost productivity per worker per day. (Indeed, employees experiencing financial stress spend around 13% of their workday dealing with money and money issues.
Now just imagine, if you can help the majority of your employees not just get smarter about
managing their finances, but actually take immediate action to put themselves into healthier
places finance-wise. What would that be worth to your organisation? Deloitte research shows that the return on investment for financial literacy programmes is 5:1, with a $5 return for every dollar invested.
What would it be worth to your employees' families? A number of different research reports suggest that a well structured financial literacy and wellness campaign that leads to employees taking real action, can be the equivalent of a 10-15% pay rise.
So we know three things:
1. Financial stress negatively impacts families, relationships, individual, and business performance. Mental stress about money, costs people, and their employers, real money!
2. More financially literate workers are generally happier at home, and better equipped to thrive and perform in the workplace, leading to higher company productivity and profits — and happier employees.
3. Helping workers strengthen financial literacy is the most powerful un-tapped opportunity for
companies to improve productivity, and also accelerate transformation, by helping workers feel safer to take risks and experiment with new ideas.
So how do we help when Gallup reports that globally only 13% of employees are engaged at work?.
A future article will look in detail at the process of developing greater financial literacy in an
organisation but let’s look at some of the results first. These come from case studies in two very different industries: financial services, and hospitality and tourism.
In each case a multi-week campaign was run (by PictureWealth and their partner SmartUp ) using a micro-learning platform featuring engaging content on various aspects of financial literacy, with continuous polling and testing via quizzes.
Financial services: Boost in confidence and client service skills
Cameron Knox, the CEO of Imperium Capital, which specialises in Global Fee Reconciliation and expat wealth management and financial planning across Asia Pacific said he was delighted with the energy and enthusiasm shown by staff during the financial literacy intervention. He noticed a significant change across the workforce, with people taking action in their own lives to better their own financial futures within the first 30 days of the training. "That's living our promise to our customers and to ourselves," he said.
Knox went onto say that even though his staff provide support to professional money
managers, the pre-assessment showed that there was a disturbing gap between how
well they helped manage their customers money and investments, and how little attention
they paid to managing their own finances.
“Frankly, I was shocked by the results of the pre-assessment," he said. "However I
was delighted by the post assessment that showed that 100% of them had already taken
action to improve their own finances. Also that 75% now felt even more confident about managing our clients money!”
Hospitality and tourism: Improvements across all levels
Another large case study, involving the employees of the Apurva Kempinski, a 5-star luxury
hotel and resort in Bali, showed similar impact. What is most interesting about this case
study was the broad diversity of participants, from white collar front desk and office staff, to
blue collar maintenance, cleaning and security staff through to to green collar grounds staff and gardeners. All had with very different levels of income, education, and financial needs and literacy, but — again — all showed some improvement to their overall wellbeing.
Post assessment results showed that 94% had strengthened their financial literacy by learning
some new ideas, and 90% of those had shared those ideas with family and significant others in their lives. 98% of participants took at least one positive action in the first 30 days, with "started or revised planning and budgeting" being the most common task completed.
In addition, just over one fifth of staff had already begun saving more (and spending less).
General Manager Vincent Guironnet (pictured, below) said he understood that his staff and their families had been suffering during the pandemic, and he embraced the program “to be able to help them make their money go further and better support their families".
"We believe this will translate into higher levels of effort, loyalty and most importantly, genuinely caring about our customers which would be hard to do if they are stressed by their own financial circumstances.”
Lessons for all HR and leaders
So what are the lessons for leaders in these and other industries? The research is clear: finan-
cial wellness is a powerful new trend in employee engagement, and is the first to look at the whole human being, not just the employee as a human "resource". Effective financial wellness programs that both enhance financial literacy and enable employees to take action can not just help these employees have a better life, but also:
Significantly improve employee productivity
Improve retention of key talent and attraction of new talent
Reduce organisational costs in regards to health insurance, absenteeism, and turnover.
Worldwide, the most progressive companies are starting to explore how financial literacy
can empower their staff, improve productivity, talent attraction, and retention, and help make
them a true "Employer of Choice", though perhaps "Empowerer of Choice" might be a
Laurence Smith is Head of Digital Asia for PictureWealth.com, a fast growing FinTech
focusing on improving employee engagement through Financial
Literacy and Wellness. He is the global #1 best selling author of Transformation Mindset and was previously Managing Director of HR, and Group Head of Learning and Talent
Development at DBS Bank.