Get The Answers: Everyone gains when workers become financially literate

Hannah McQueen, founder and director of enableMe. Photo / Supplied

Small business owners should realise their staff bring their financial worries to work and employee debt stress is an employer problem. A recent survey showed that just over half of Kiwi men and three in five Kiwi women are feeling financially strained by the recession.

What has a "financially strained" employee got to do with an employer?

It's no secret that financial stress has dire effects on people's lives from relationships, health and self-esteem through to their professional life. And there's plenty of research showing it chops money off businesses' bottom lines. While the impact of the individual debt epidemic on organisational productivity is evident, the issue is that while historically dealing with financial strife among staff has been an occasional crisis management issue, it is also a fundamental issue for an employer.

The lack of understanding of some basic financial theories and their effect has also been recognised by the Government which has pledged to increase the financial literacy of New Zealanders.

If an employer wants to help a staff member (without a payrise) what can they do?

The best option is to improve the employees' financial literacy by providing them with personalised and impartial advice. Our advice is always based on the premise that you will never receive a pay rise. Instead we give people tools to get ahead without having to rely on their boss to give them more money. This engenders a sense of control - and is enormously liberating for the employee.

It is part of a holistic approach to managing people that moves beyond the traditional workplace focus and into people's personal lives. Providing support and advice for people is one of the most highly effective ways to boost staff morale, workplace culture, productivity, retention and ultimately profitability.

In what instances do employers go to an external provider to give staff personal financial advice?

Most employers realise they don't have the tools to provide solutions and yet face a potential collapse of productivity and morale with dire long-term outcomes and the potential loss of key talent.

Targeted financial advice for employees provides solutions to many different organisational problems. One business came to us seeking financial training for its staff who faced a new payroll change from fortnightly to monthly. In this instance the goal of the financial training was to empower the staff - and provide them with a sense of security in learning how to manage their money from month to month, and indeed generally improve their lifestyles.

In what other cases is personal financial coaching for employees appropriate?

Last year, Auckland International Airport came to us seeking a financial wellbeing package as part of its annual "wellbeing" week for staff, seeking a solution that would provide opportunities for individualised advice - as opposed to generic presentations.

The company's aeronautical policy manager Mike Clay says that not only have staff found getting an objective and independent view of their personal financial position to be an eye-opener, but, more importantly, it means those who were in a financial rut can now see light at the end of the tunnel.

Ultimately, one of the key reasons people come to work is to achieve financial freedom in their lives.

Yet the majority of Kiwis have concerns about financial issues and, based on my experience, a growing number have serious money problems.

It is essential that employers take a holistic approach to the wellbeing of their workers through providing them with financial direction - the best performance boost an employer can provide.

Hannah McQueen is director of enableMe - Financial Personal Trainers, and author of The Perfect Balance: How to Get Ahead Financially and Still Have a Life.

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