People generally worry about expenses, loans, debts, bills or taxes. The list can be endless and your load can affect the performance of the talent without realizing the cause. For this reason, organizations must question their interest in accompanying their collaborators on these types of issues. A not minor detail is the lack in our educational system of financial orientation.
As reported by Equifax, which manages the Clearing of Reports, there are almost one million Uruguayans with records of non-compliance for not having paid in a timely manner as of May of this year.
Employees with completed high school have not formally received tools to manage their money, having a frenetic pace that pushes them to “live from day to day”; not teaching the importance of saving and investing. Mainly, how to manage personal finances like a business. That is why it is a mistake to think that financial stress is exclusive to those with lower incomes. No one is saved from the unforeseen!
A stressed person is a person who does not perform at work, due to concern, but also due to demotivation, feels that in his day he does not cover all his expenses. For the organization, this employee also represents a problem, since he is not as efficient as he could be, leading in many cases to labor informality.
Financial education is a necessity, it allows for more stable workers, less stressed and aligned with the organization, collaborating with the reduction of turnover and the probability of work accidents.
In addition, many of the collaborators will deal with problems of this type during work hours and spend at least five hours a week thinking about it. Imagine a worker performing his tasks at height or operating a machine not focused on his task, worried about how to pay for his daughter’s 15th birthday or the pending installments of a 50-inch television. A collaborator exacerbatingly extending his work day, in order to work overtime and increase his salary without evaluating the threat of not resting adequately. It’s not only a risk to him but to his teammates, enough for organizations to turn on a yellow light.
According to PwC reports on the financial well-being of employees, 59% of workers are worried about their finances. The companies, through their Human Management areas, have the challenge of helping their talents to better understand their financial well-being. The key principle in this topic is that understanding and providing tools is not managing your personal finances. In any company wellness strategy, financial education should be included because of its relationship to mental, emotional, and physical well-being. This is why areas such as occupational safety and health (OH&S) have been involved in these issues or incorporated into the agenda of bipartite safety commissions.
This has impacted the projection of talents and altered career and training plans. The need to increase income quickly sometimes exceeds the decision to train or invest time in the roles that the collaborator is really useful and generates value for the organization.
Talent management teams in our country have identified financial stress as a significant cause to explain absenteeism and work accidents in the industry. Coming to the conclusion that financial well-being is a condition and not an advantage for the care of talent. In recent years, trends in Human Resources departments were based on promoting the physical health of employees, offering discounts in gyms and healthy food, for example, recently financial health has become a key tool to increase the well-being of the collaborators.
How can companies support such financial education?
The implementation of internal financial education programs has as main tasks to help the employee manage their family economy and keep their finances in balance; this will give you security and confidence, allowing you to better concentrate your energies on work activities and improve your performance and capacity for innovation. Always being clear that it is not getting into the “pocket” of the employee. Implementing a program to improve the financial training of employees is a complex matter, it is not just about teaching some concepts and tools, but understanding what the financial problems are and how employees make decisions, this will help select the best strategies to develops in the organization.
The need or problem to work on is to give employees basic notions of personal finance, from how to order expenses, how to put together a budget, what are the best savings practices, etc. In the practice of these instances, it is important to evaluate whether the company should directly invite the affected collaborators who most need these tools, or leave them open to those interested in the topics.
Not all employees have a diagnosis of their finances and how they can improve, so a financial well-being questionnaire can guide them about their ability to meet emergency expenses, cover monthly expenses, frequency with which they survive with their finances.
In some organizations at the regional level there is a concern to help and train their employees in managing their finances by promoting financial wellness programs or tailored to the different needs or concerns of the groups. For example, investment plans. Talking about saving is proposing objectives for the preparation of a budget, through which you can set a goal to achieve in the short, medium or long term (you do not save without an objective).
On the other hand, workshops and training on personal finance with follow-up are the order of the day in large companies. Depending on the resources of the organization, it is convenient to evaluate if these topics will be moderated by referents of the organization or external advisors. This is directly related to the company culture. It is not easy to start talking about these issues and to break the ice an alternative is to involve a third party.
The challenge for talent management is to identify this need and use the best tailored tools to mitigate accidents and achieve better results.
* Member of the directory of the Association of Human Management of Uruguay
