Why Employers Should Adapt Financial-Literacy Program in the Workplace?
If you want to have an outstanding organization, invest in your people.
Our employment rate as a nation is currently at 94.20 percent, according to the labor force survey done by the Philippine Statistics Authority. PricewaterhouseCoopers estimated that 75 percent of millennials will be part of the global workforce by 2025. This generation is getting impatient with the normal work routine and usually hops to other companies due to the “greener pasture” mentality. Millennials are very creative when it comes to information-technology (IT). With the existence of more than 700 IT-business-processing outsource (BPO) companies in the Philippines, only 1 percent of the industry is providing retirement solutions or any related financial-literacy program to their work force.
The most common benefits of employees today, in the private or public sectors, are paid leaves, paid holidays, life insurance, 13th month pay, profit sharing, yearly bonuses, and health and wellness program.
Very few employers are giving retirement incentives, and believe it or not, that big lump sum will not also suffice for an employee since that money statistically can be wasted away easily because of poor financial habits. People’s lack of self awareness and self discipline will not get things done and the big pay day won’t last due to overwhelming distractions offered by the different shopping malls in the metropolis.
There’s a big gap between the recent survey of literacy rate that we have as a country at 97.3 percent and the prevailing financial literacy rate. The Asian development bank revealed in its study in 2015 that the Philippines does not have a countrywide strategy for financial education. In contrast, Indonesia introduced its public strategy in 2010, while India started in 2012.
Executive Director of Investors in People Gerry Plana FPM confirmed that “some organizations were having 50-percent attrition rate and that number is totally alarming. If that continues, you are killing the company fast.” You need to have a sustainability strategy that focuses not only on profit and purpose, but also a strategy that empowers your employees.
He added that organizations must create an engaging workplace since almost all industries are toxic. With the stressful environment in the workplace, it’s not only enough to give money as compensation to the workers. Companies must guide workers by providing them and their family opportunities to invest in the future, as well as for their children.
Creating a program within the workplace or hiring a Registered Financial Planner can help lessen the prevailing financial literacy gap. Sooner or later, these young people will have a family of their own. Being financially literate will have a positive impact on society as a whole. Empowered and equipped workers give an advantage to the bottom line of any company, in particular, and to the nation, in general.
As of the moment, the most common concern of an employee in terms of finances pertains to retirement. A collaborative research made by Bank of America and Merrill Lynch in 2015 showed that workers responded very well when they get empowerment programs like personal finance literacy in the workplace. Offering financial solutions can help improve business with increased employee satisfaction. This helps make employees become loyal, and productivity, as the study found out, could go as high as 91 percent. This definitely contributes to a healthier bottom-line.
The study also found out that if employees are not stressed with their finances, they are more engaged at work. This way, productivity can be doubled. No one can deny the fact that employees with high morale at work are more productive.
The autonomy to make decisions base on their financial situation gives workers a boost in self-esteem. Employers will also be happier if they can retain their productive employees by giving them powerful financial literacy programs. Attrition rate will go down when workers enjoy their workplace where they are being given powerful financial- literacy knowledge.
The change that this nation needs could begin in the workplace. Every company not only wants to survive but also to thrive. This is why good employers must create a sustainable strategy to retain good, productive workers. If you want to have an outstanding organization, invest in your people.
David Isaiah Angway is a registered financial planner of RFP Philippines. He is a Fraud Risk Ops Analysts and have an excellent attention to detail and concern for all aspects of the job. He is also a columnist at Business Mirror.
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