Why should managers worry about employee budgeting and financial wellness? September is the month to place an emphasis on payroll, with National Payroll Week, and it’s a reminder that we need to ensure we’re providing our employees with tools to help them with their financial goals.
We’ve talked about pay equity and transparency, and the need for a greater understanding of what positions pay, but if we and/or our employees don’t understand finances, how much are we helping? If you asked your staff, how many would know the difference between gross and net pay? Could they tell you what the different deductions are that are coming out of their checks?
I’ve seen many eyes glaze over when talking about money and I get that most people just want more of it; they often don’t really care to understand it. But we aren’t helping ourselves or others by ignoring the importance of developing an understanding of finances. HR and Benefit Managers talk about ESA’s, HSA’s and FSA’s (acronyms having to do with savings that many people don’t understand), but they’re meaningless anyway if we don’t find ways to show staff how they can directly affect and potentially improve their lives.
I know that a lot of people live paycheck to paycheck, and that’s frustrating and depressing. We have tools that may help them move past that, but we often aren’t using them or making sure they’re aware of them. Do all your staff take advantage of company matching (regardless what benefit it relates to)? Has there been any discussion with those who don’t benefit to help them understand what they’re missing? If you don’t want to have these direct conversations and/or don’t believe you’re the best person to offer this information yourself, have you brought in a third party to help explain? Does your staff know and understand all the different benefits you offer that can help them financially?
Are you paying for benefits that aren’t getting fully utilized?
I’m an advocate for requiring financial education in high school, requiring all graduating students to express understanding of basic financial needs: how to read a paycheck, how to budget, different types of investments, what credit scores mean. To me, these are some of the most basic tools we need to provide our youth, and yet we don’t.
We have a chance to pass on this information to our staff. Helping employees better manage their money and/or at least helping them understand how to utilize the different options and tools may have a positive impact on their lives.
Advocate for and provide financial education in your organization. It’s a good thing to do.
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