Finance Education to Offer for Employee Retention
Long gone are the days of remaining loyal to one company for the duration of a person’s career. With the rise of job hopping, the great resignation, and quiet quitting, it’s more important than ever to retain employees.
Of course, competitive salaries, bonuses, and benefits are high motivators to keep many team members. Company culture and feeling valued are among the top, too. However, in the ever-changing job market, people are seeking out positions that holistically contribute to their lives. Additional benefits, like access to financial education programs, are increasingly expected. To make your program a sought-after perk, be sure it covers these five areas:
Home Buying
For many, the goal of owning a home is high on their priority list. A house is a place they can call their own and create memories. It’s where they’ll entertain friends and family, see their kids or pets grow up, and get to decorate however they like.
But there’s also a high cost associated. In a market as expensive and competitive as real estate, it’s unlikely most people will be able to afford to purchase with cash. Although it does happen, taking out a mortgage is the most common financial approach.
This is especially true when buying a first home. According to leading mortgage news site Mortgage Research Center, mortgage pre-approval is an important consideration for first-time home buyers. While not absolutely required, securing financing before touring homes can give housing market newbies a leg up.
Covering the basics of home buying and ownership can make employees feel confident in their lives outside of work. That confidence can make them more at ease in their day jobs and lead to better, more productive work. Plus, setting down roots in an area near the office — if your company isn’t fully remote — can encourage retention through community building.
401(k) Plans
Preparing for retirement is an important but often overlooked aspect of life. It’s easy to get caught up in more pressing expenses that are needs or wants right now. However, employees need to know the steps to prepare for retirement.
Companies that are able to share 401(k) information in a clear, focused way are bringing tremendous value to their employees. No one wants to work their entire life, but bridging the gap between employment and a future as a retiree is challenging. By educating your employees on this important topic, you’ll communicate your concern for their long-term well-being.
Focus on benefits provided by your company, specifically if you offer a 401(k) match. Highlight the percentage and give clear instructions on how team members can take advantage. Promoting your retirement offerings through employee emails or internal newsletters will underscore your commitment and foster employee buy-in.
Budgeting
While it may seem basic, budgeting is a challenge for many people. It’s hard for employees to stay on top of work when budgetary woes are consuming their mental energy.
Consider bringing in experts to speak on budgeting. It’s even better if they offer an engaging interactive activity because that can help make the information stick. Something as simple as demonstrating a sample budget can put things in perspective and encourage employees to create one of their own.
Consider sharing free budgeting tools for your employees to take advantage of. Remember, people with different learning styles may find certain formats more or less suited to them. To diversify learning options, look for worksheets, podcasts, articles, and e-learning modules. These resources can help employees navigate their current financial state and envision what their financial future can become. Employees will appreciate that you’re helping them to reach their financial goals.
Credit
Three little numbers that can amount to a lot more than people might think, a credit score is a vital financial measure. Do they want that mortgage mentioned above? They’ll need a decent credit score. Without one, they may get turned down outright or have to pay much more in interest.
Unfortunately, many people have a limited understanding of what credit is and how it works. Your financial education benefit should offer a resource that covers all aspects of credit for team members. This could come from a respected financial company’s website or be offered by a financial education vendor. Ideally, it would include:
- What credit is (and how to use it)
- What factors influence a credit score
- How to improve your credit score
- Credit health best practices for maintaining your credit score
Remember to communicate about free credit reports, which can be a valuable tool for monitoring credit health. Tying credit back to real-life impacts — like purchasing a home or a car — can put things in perspective for employees.
Debt Repayment
There’s good debt and bad debt, mortgage debt, student debt, credit card debt, and the list goes on. Employees may experience significant stress over the amount of debt they have, so sharing methods for managing it is powerful.
It’s helpful to communicate that chipping away at debt can help employees save money because they’ll be paying less in interest. It’s even better if your program can provide specific examples with numbers to show the impact of paying off debt in a strategic way.
Consider incorporating training on managing stress related to financial situations like debt, too. Replacing dread of their situation with potential solutions can be one of the best ways to help employees not feel overwhelmed.
The employee experience has evolved, and today’s talent is seeking more than the basics. Exceeding expectations will help with retention. People want true value from the companies they work for, and financial education should be part of that mix.