To many employers, the path to company success can be boiled down to a simple formula: create a plan, hire top talent to help carry it out, and then fine-tune future plans for even more success. But how do you go about attracting–and, crucially, retaining–that talent?
Financial training for employees is a great way to help your company be as appealing a workplace as possible.
On top of ensuring you retain talent, investing in employee financial education gets you results that you just can’t argue with.
The benefits of employee financial training
We’re going to break down some of the top advantages that come with prioritizing employee financial training.
Improves employee financial literacy
Finance touches every part of your business–after all, whether you’re a for-profit company or a charitable body, you can’t get by without cash flow. Every department relies on finance in order to function, and finance influences every department.
On top of that, employees also have personal finances to reckon with–which are determined to a large extent by their salaries. And salaries influence retention; around half of employees say they’d leave their current employer to perform the same function for a better salary.
So, teaching them how to optimize their spending with financial training designed for everyone is sure to boost your retention rates, as they’ll know you value their work and want them to make the most of their money.
Streamlines company processes and communication
One thing that delays company processes, and especially communication, is confusion.
It’s harder to hit the ground running if people you work with are using terms you don’t understand. It can slow down processes as people have to walk through explanations before they can start being productive.
To streamline these processes, consider training your employees. When they know the common terms, acronyms, and processes involved in finance, they can have conversations about it and complete relevant processes much faster as a result.
For example, one process that can be streamlined would be payroll queries. With the right knowledge, UK-based employees would be able to jump straight into a discussion about the government pension scheme, and American employees will feel confident asking about Medicare Insurance payments and social security. This would lead to less time being spent clarifying terms and asking basic questions before they can get to the bottom of any queries.
Reduces fraud and finance mishandling
Scammers rely on catching their victims by surprise–which is why financial training is the perfect ammunition against their fraud attempts.
You can use employee financial training to educate everyone working for your company about both the dangers of fraudsters, and the common tactics they need to protect themselves and your company against. This makes it much harder for them to become the victim of a scam.
And with the FTC receiving over 2 million reports of fraud in 2020 alone, that’s a very important protection to offer.
A similar rule applies to finance mishandling. For example, an employee that struggles to have enough money for groceries at the end of the month because of overspending in the weeks before needs to learn how to better manage their finances. Financial education helps them control their spending, and stay out of debt.
Increases employee retention and engagement
We’ve mentioned that increasing employee retention through financial training is a viable strategy. But what about engagement?
As it turns out, 77% of Americans regularly worry about their financial situation, which accounts for a sizable chunk of the workforce. And, of course, anxious employees will find it harder to engage productively with their work.
By investing in employee financial education, you can help ease the worries of these people. This makes it much easier for them to give it their all at work as they won’t be worrying as much about their financial problems.
Plus, it doesn’t hurt that reduced stress levels make for happier employees who don’t crave the kind of life change brought by finding a new job. Numbers prove it, too. 68% of employees are more likely to stay longer at their current job if their employer offers them financial wellness benefits.
4 types of financial training
Now that we’ve established why you should invest in employee financial education, it’s time to consider the practical side of things. What does financial training actually look like?
1. Financial literacy and analysis
Your employees may wonder how useful financial analysis could be for them, But, it can be incredibly useful, particularly if you want to save some money on a personal scale.
With a strong foundation in financial literacy and analysis, employees can build their budgeting and financial planning skills. This boosts their overall satisfaction levels, while making sure they’re better prepared for anything the future might throw at them.
An example of financial literacy training would be seminars that cover common finance terms. These would aim to help employees look at financial documents and know what they’re dealing with.
This training has the goal of improving employees’ overall understanding of business finance. It’s also aimed at helping employees learn to analyze their own finances.
2. Tax compliance
When it comes to employee financial training, few things are more important to get right than tax compliance.
Depending on where you’re located, taxes can be relatively simple… or very, very complicated. That goes doubly if you’ve recently relocated to a new country, or if you’re unfamiliar with self-assessment tax return or tax laws in general.
That’s why tax compliance training is absolutely crucial.
Employees who have (or want to have) side hustles can benefit particularly from this type of training. For example, UK-based employees could learn how to use tax return software to run their businesses, or you could provide those working in the US with information on how the IRS taxes self-employed individuals.
With around 36% of Americans counting themselves as ‘independent workers’ who engage with side hustles and one in five Brits having started a side hustle since March 2020, that’s important information to arm your workforce with.
3. Industry-specific training
Every industry is unique in its needs and demands, as well as in the skills its workers need to master. Finances are no exception, which is why industry-specific employee financial education might be just what you need.
For example, industry-specific financial training might cover topics like industry standards, advice for people with flexible contracts, or details on how commissions work.
The last one, in particular, merits a lot of focus.
When employees earn bonuses and even salaries via commissions, they need as much knowledge as they can get on the ins and outs of those commissions. How much can they make before they’re taxed more? If they are taxed, how much will they need to pay to HMRC or the IRS? Which items or services earn higher commissions, and why?
These are just some of the kinds of questions your training needs to address so they can do their jobs effectively.
4. Leadership and management
Leaders within your company need to be able to help their departments or teams flourish. Training is always a great way to help with this, and that includes both employee wellness training and the kind that’s focused more on finance.
Leaders will often have to manage budgets for their teams or departments. With proper training, they can learn to use every part of their budgets for maximum impact, so every employee has what they need to deliver great results.
They’ll also need to know how to use the tools that your company relies on for management. For example, managers that know how to leverage cloud HR software to manage training, goals, and employee performance for their teams will bring lots of value to your company, including financial value. That’s because they’re using their teams and financial assets to their full potential.
Employee financial training is directly helpful to both your company and its people.
On top of helping your company optimize its financial performance, employee financial education is great for boosting retention rates. That’s because it sets your company apart from the competition, while also teaching employees how to make the most of their salaries.
In a word, it’s universally useful. That’s why it’s well worth the while investing in employee financial training.
About the author:
Kelly Dent is the Global Content Editor at tax return software Sage. She has a decade of experience writing and editing content across a wide range of audiences and media, from PR and editorial pieces to social media and podcast production. She specializes in tech and business content, and co-produces Sage’s award-winning small business podcast, Sound Advice.
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