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Providing financial education for employees

Article provided by Debt Rescue

 Financial Freedom is available to those who learn about it and work for it. – Robert Kiyosaki

Are your employees battling with debt? There are many financial struggles facing today’s workforce, including maxed out credit cards, extended home loans, ineffective savings plans and student loan debt. With an average of one in four employees diagnosed with depression, helping your employees achieve financial wellness can impact your business positively.

What type of education do employees need?

As financial wellness and education are very broad topics, education and training around these very crucial topics can help set up your employees for a better future. Crucial topics include: how to create a budget, planning for retirement, saving money and reducing – or staying out of – debt. Offering your employees this invaluable knowledge and training in the workplace is a value-add they will appreciate in the long run.

According to Human Interest, you should start by offering programs that cover the following crucial topics:

  • Personal finance management – this includes educating employees on creating a budget, understanding tax choices and implications and why they need an emergency savings account.
  • Retirement planning – according to the South African National Treasury, only 6% of the population will have enough money to retire comfortably and keep up with their pre-retirement standard of living. This is due to the fact that people are not entirely clued up on how saving plans work and many employees take out their investments when they leave their jobs. Employees need to realise the importance of planning for retirement early and understand their available options.
  • Debt management – debt is a huge problem in South Africa. Employees faced with enormous amounts of debt need to understand how to manage their debt effectively to ensure a stable financial future.

How do you go about educating your employees on financial wellness?

Forward-thinking companies can use the following tactics to improve their employees’ financial wellness:

1: Organise training

Let your employees know that you will be providing extra financial education as a work benefit, not extra work. There are a few ways to go about training employees:

  • E-learningthe easiest way to provide training is to find relevant online courses for employees or source free or affordable online professional seminars. Technology-based learning is cheap and convenient. This way they can learn at their own pace.
  • Group sessionssegmenting employees into groups that face similar challenges can help them learn together and even support each other while learning. Employees can be split up into groups such as the following: employees with debt such as student loans. Those who are close to retirement. Those who are recently divorced or widowed. Those who are single parents, and those who are first-time homeowners.
  • Individual mentoring programs one-on-one sessions can be arranged for employees that may not be comfortable discussing finances in a group session.

2. Encourage the use of online tools

There are a lot of online financial planning tools available, which are ideal for your employees. Employees can benefit from using saving, tracking bills, investing and budgeting apps for free or at an affordable price.

3. Help your employees use their company benefits effectively

Most employees don’t know the extent of their available employee benefits. You need to offer your employees company benefits and make sure they know how to use those benefits effectively. Benefits may include:

  • Health plan benefitsmake sure employees don’t only choose an effective health plan, but they also use all the benefits that come with the plan.
  • Retirement plan your employees are more likely to save for retirement if you offer retirement benefits. Although this may be difficult for a small business to offer, you can subsidise a portion of their monthly retirement investment or offer to match how much they are willing to pay towards it. By doing so, you will also leverage tax advantages.
  • Performance bonus if you want to motivate your employees to work harder, offer performance bonuses.
  • Self-improvement benefitif you’re able to, either sponsor or subsidise any education or training that can enable your employees to grow in their careers. Even financial education can be included as a self-improvement benefit.

4. Encourage effective feedback

Employees should be encouraged to provide honest feedback with regards to the company financial education. Their input will ensure that you provide them with an educational program that they enjoy and can gain from.

Make sure you approach the education with an agile state of mind so that you can accommodate your employees.

5. Encourage debt counselling

No matter how much effort you put into educating your employees on financial wellness, if they are in a substantial amount of debt, they may not be able to gain financial freedom without professional help. Encourage your employees to go for debt counselling if they are battling with debt. Debt Rescue has helped thousands of South Africans become debt free – we can help your employees too.

Debt Rescue is a proud Partner of the NSBC.