Our economy has been improving, albeit slowly. But just because we’re beginning to see a little daylight, that doesn’t mean we can return to our old habits. One thing many of us are learning from this recession is that we need to do a better job of managing our money. The question is…where do we learn how to handle our finances? And, I’m talking about the basics – making a budget and sticking to it, setting aside savings, evaluating spending, etc.
I recently had the opportunity to hear a presentation on financial literacy at the Alabama SHRM Conference. Kudos to the HR Pros in Alabama for recognizing that financial literacy is an important topic in the business environment.
At the session was none other than my friend Janet Parker, SPHR. Janet is the Executive Vice President of Human Resources for Regions Bank. She’s also the former board chair for SHRM (which is how we met). And, she was appointed by President George Bush to the President’s Advisory Council on Financial Literacy. Janet is a super smart HR Pro so I seized this opportunity to get her thoughts about financial literacy in the workplace.
1. What exactly is ‘financial literacy’?
The President’s Advisory Council on Financial Literacy developed the following definition: “The ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.”
2. Why should business professionals care about educating their employees on this subject?
Our youth are not receiving financial education in school. According to the National Council on Economic Education, only SEVEN STATES REQUIRE A PERSONAL FINANCE COURSE.
The workplace has many opportunities to provide education as employees experience life events: home purchases, retirement planning, family changes, and health changes. Using the workplace as a financial education classroom is a tremendous opportunity to increase productivity, engagement and loyalty.
3. With all of the increased demands on business, how can managers ‘sell’ the idea of financial literacy education to senior leadership?
Let me share a piece of a report by E. Thomas Garman, president of the Personal Finance Employee Education Foundation and professor emeritus at Virginia Tech University. The following statistics clearly provide a business case for financial literacy programs in the workplace:
“30 million workers — one in four are suffering serious financial distress. Nearly half of those who are financially distressed report that their health is negatively impacted by their financial worries; and 30% to 80% of financially distressed workers spend time at their place of employment worrying about personal finances and dealing with financial issues instead of working.”
Employers have an opportunity and a responsibility to educate workers at all levels about financial literacy and there is no better time than now to start.
4. Lastly, here at HR Bartender, we do serious work but try not to take ourselves too seriously. So, my last question is what’s your favorite drink (adult or not)?
It’s called an Orange Thing and is exclusive to Birmingham. It’s served at Highlands Bar and Grill, which opened in 1982. The Chef, Frank Stitt, has won the James Beard Award. His meals combine the flavors of South France and the American South.
My thanks to Janet for sharing the business case for financial education. We spend a lot of time here at HR Bartender talking about the significance of leadership and customer service. It’s important to realize that, if our employees are distracted by financial challenges, it will ultimately impact their performance.
This is a critical topic so stay tuned for more information about workplace financial literacy programs. Teaching our employees how to manage their money will not only help their personal bottom line, but our organization’s as well.0