Training Financial Wellness in the Enterprise

Research in the Kenyan employment sector indicates that finances are the leading cause of employee stress. Stress has a negative impact on employee productivity and morale, thereby costing the employer millions of shillings every year. Many progressive employers already have Employee Wellness Programs in place aimed at reducing stress among other goals. However, most enterprises have not yet recognized that Financial Wellness is the missing component of such programs without which the effectiveness is not maximized since financial issues are the leading source of stress.

Financial concerns may be a personal matter, but they directly affect performance at the workplace and especially for SMEs where the headcount is low and staff multi-task most of the time. Research suggests that 15 to 30 per cent of employees have financial problems severe enough to negatively affect productivity.

A financially stressed employee spends an average of 20 hours of work time on his or her personal financial problems. In addition, they are not fully focused on their work, are always agitating for loans, salary increments and/or are prime candidates for leaving the employer in search of a higher pay normally denoted as a greener pasture. Financially pressed individuals may be tempted to misuse or steal employer resources. All these tendencies increase employment costs thus eating into the profits of the enterprise.

On the home front, financially challenged individuals tend to have less than stable families, find it difficult to give their children a comfortable life and a good education. Many are unable to buy a home and most retire to a life of penury.

It is an acclaimed fact that a financially healthy employee is a productive employee. As such, it is necessary to provide financial wellness programs that increase employee productivity, reduce staff turnover and lower other HR costs at the workplace. Human Resource economist insist that every shilling invested in employee Financial Wellness program earn three shillings for the employer in increased output and reduced costs.

Dimensions of Wellness

It may help at this point to define financial wellness so that it becomes clear what staff need to be trained on. Financial wellness is just one dimension of wellness. The others dimensions include: physical, spiritual, social, emotional, intellectual, environmental,mental and medical wellness. Wellness is define by Charles B Corbin of Arizona State University as “a multidimensional state of being describing the existence of positive health in an individual as exemplified by the quality of life and a sense of wellbeing.” Thus in simpler terms we can define wellness as the active process of becoming aware of and making choices toward a more successful existence. It is a process because improvement is possible at all times provided the person is continuously seeking more information about how to improve. By seeking information, the person ends up with a number of choices out of which he will select those in his best interest and the measure of success is determined by each individual as a collection of their accomplishments in life.

More specifically, financial wellness is an intricate balance of the mental, spiritual and physical aspects of money. This unique combination is an ideal one has to strive towards in their dealings with money. Financial wellness is having an understanding of one’s financial situation and taking care of it in such a way that one is prepared for financial changes. Maintaining that balance consists of being comfortable with where one’s money comes from and where it is going.

As every entrepreneur will appreciate, the subject of money is not taught in any institution but failure to manage personal finances results into numerous challenges as mentioned above which impact the bottom line of the enterprise.

Workplace financial literacy programs can be run in many ways.

Talks

Credible speakers who are not salesmen can be invited to deliver short (below two hours) talks on subjects like ; debt management, budgeting, passive income sources, money myths and such other topics which are  fascinating, empowering and insightful thus able to shatter the mould on conventional thinking like salary increment is the only way out for employees.

Company specific seminars

One or two day seminars conducted at the work place, if the venue is appropriate or held at a location away from the workplace. The staff of the enterprise can be taken through areas like:

  • How to engage in “accurate thinking” and how to use this skill to grow personal wealth.
  • How to make well informed decisions when it comes to spending, investing or borrowing money.
  • How people habitually distort their perception of reality [money and wealth creation] and how to prevent this from thwarting financial goals.
  • Which thinking and behavioural habits are disempowering when it comes to financial wellness and how to change them.
  • How to become truly inspired to constantly create wealth, rather than experiencing it as a difficult and painful chore.
  • How to employ these insights in the enterprise to grow its profitability and value.
  • More information about do-it-yourself financial wellness programs and providers of several financial services and products.

Sponsorship to open programs

Because the numbers in an SME may not merit conducting an in-house program it might suffice to send staff to open programs which normally have the same topics as discussed above. During such programs, providers of financial products and services are invited to exhibit and also answer questions that may be specific to them. Such forums make it easy for employees to move from knowledge acquisition to taking action.

Pre-retirement/ Retrenchment programs

Parting is never an easy process for anybody but for enterprises, retrenchment and retirement of staff is a regular occurrence. Financial literacy programs should be a must for persons in transition. It gives them the confidence to move on and also alerts them about the financial pitfalls ahead. From experience it helps to run such programs long before the exit date because at the point of exit, bitterness and panic may brunt the effectiveness of such programs.

Self-Study Programs

Staff can be encouraged and facilitated to join such programs offered by financial educators and financial literacy coaches. Though few in the country at the moment, such programs do exist and they are conducted during after work hours or during weekends. Employers can link-up staff to such programs

Staff benefits from Financial Wellness Programs

Most of the above programs have numerous staff benefits including;

  • Staff discovering the illusive path to financial wellness and how achievable it is without the involvement of the employer.
  • Staff increases self-awareness, self-confidence, resourcefulness, energy levels and the quality of life which ultimately result into productivity at the workplace.
  • Staff see improvements in their financial situation in the short term and reap the benefits for a lifetime without having to switch jobs.
  • Reduction in stress levels while increasing focus, concentration and performance in the workplace.
  • Getting that competitive edge required in to-days business world by gaining invaluable insight into the prerequisites of success in any area of life.

Enterprise benefits

As a results of such programs the enterprise will be able to effectively  address challenges like high staff turn-over, rise in recruitment costs and the cost of training new staff thus the enterprise will gain by improved staff retention which leads to intellectual property retention, staff royalty, staff well being and gaining the preferred employer status.

Reduction in stress levels, absenteeism and related work mistakes leads to staff focus, concentration, productivity, quality customer service and meeting of output quality standards. Financial wellness programs have other benefits like reduced workplace conflicts, abuse of company resources, theft, fraud and corruption thus resulting into a good work culture, high staff morale, quality relationships and financial awareness.

As an entrepreneur or manager of an SME, you have many reason why your staff should be trained in financial wellness, yours is to show them the way forward now . Let us know how we can partner

Wahome Ngari – Principal Consultant/ CEO, Citadel Consulting Ltd.