In today’s world, we all face so many stressors, including war, inflation, and the threat of an impending recession. Even with everyone wondering about a recession, one thing hasn’t changed: the talent market remains tight. Despite some of the recent high-profile layoffs, the U.S. job market remains strong. Companies are hiring and keeping their focus on how to retain and develop their talent.
It’s not breaking news that retention has been a challenge over the past few years, and many of us are competing with others in our industries, for the same talent. This creates a tempting environment for employees to leave one job for another to secure even a few more cents per hour.
That’s why we’re all seeking an edge in the war for talent that can set our company apart; to give our associates another reason to stay. For our company, that differentiator is teaching financial literacy to all our associates, giving them the language of business. What we’ve learned is that when you embrace financial transparency in business and take the time to teach the numbers and how each person impacts them, employees take those same lessons home to create stability. When people have their personal financial house in order, they are better able to bring their full and productive selves to work each day and experience less stress overall. It’s a virtuous cycle where everyone wins.
Businesses as Educators
Many people entering the workforce these days haven’t been coached in the basics of personal financial knowledge, such as making a budget, sticking to it, or understanding how devastating something like debt can be. Now, in the wake of rising inflation and interest rates, we’re seeing an even greater impact from that lack of knowledge. People are anxious and hurting.
“When people have their personal financial house in order, they are better able to bring their full and productive selves to work each day and experience less stress overall. It’s a virtuous cycle where everyone wins.”
Consider that more than half of all Americans lack the funds to cover an unexpected $400 emergency, like replacing a blown tire or a trip to the hospital. That means millions of us are a mere hiccup away from sliding down into bankruptcy. Given that, it shouldn’t come as a surprise that associates keep an eye out for the next job in hopes of a few more dollars—even if it might mean leaving a job or a company culture they enjoyed.
Our company was built around the benefit of teaching our associates business and financial literacy through the leadership system we call The Great Game of Business (GGOB). Not only does teaching these skills help our associates better understand how the work they do daily impacts the company’s financial health, it also connects them to the bigger picture of our company and gives them a superpower they can take home. Once you understand how a budget works, you see that it’s basically the same at work, as it is at home.
To teach this knowledge, we have developed numerous financial training programs over the years with the help of our associates and GGOB practitioners. We’ve offered courses on topics like building rainy day funds to head off future emergencies as well as understanding compounding interest. As a result, our associates can make better decisions with their money, and, ultimately, improve the quality of their lives.
Closing the Financial Knowledge Gap
As HR professionals, our role has, historically, been viewed as defense, a necessary function to stay in compliance and hire the right people. We have joked about HR math and other quotes that diminish the need for HR to understand our impact to the financials. Today, many of us are working to change that perception by finding ways to connect the results of wellness benefits and other HR programs to productivity and ultimately the bottom line. To be supported in offering the best benefits to retain our talent, we must be financially astute and able to connect the results of our investments to the financials.
It can be easy to tune out talk about financial knowledge and money as just about numbers. But it’s not: It’s about people, it’s about job security, and ultimately, it’s about business and personal stability. In one case, a new associate, let’s call him Tim, wanted to treat his family to wonderful Christmas presents. Tim was short on cash, so he turned to a payday lender to borrow $1,000. The lender laid out a payment plan where Tim thought the load would be paid off in less than a year. What got lost in the fine print was that the loan came with a compounding annual percentage interest rate of 350%. That’s not a typo. While Tim faithfully made his payments for the first few months, he soon realized he hadn’t even begun to pay down the principal of the loan. He might never pay it off. He was facing a crisis.
Fortunately, Tim had somewhere to turn to for help—our employee emergency assistance fund, funded by fellow employee donations, provided relief and the committee worked to determine the ever changing payoff amount. Unfortunately, millions of Americans like Tim find themselves desperate and vulnerable enough to turn to these predatory lenders. We believe it is our role as employers and co-workers to educate and offer alternatives, to give people the training, understanding, and help they need to close the financial knowledge gap. That’s a benefit they’ll carry with them for the rest of their lives.
Retention Through Trust
There’s another benefit that comes from teaching your associates about the financials. It takes the fear of uncertainty away -which alleviates stress. If people truly understand what makes their company financially sustainable, they don’t have to fear an unexpected layoff. Even better, it gives them the opportunity to be involved in the company and make decisions for the future.
We’ve experienced this dynamic in action twice in recent history: the first time with the onset of the 2009 recession and, more recently, in March 2020, when the pandemic hit. In both cases, our company’s leadership was able to lean on financial transparency and the business literacy skills of our associates to paint a picture of the futures at hand. Everyone knew what we were up against: the good and the bad. They also knew we had never laid anyone off in our 40-year-history. Everyone knew we were in this together.
What’s remarkable is that when you tell people the truth, they want to help make things better. That sense of engagement breeds trust and loyalty, which then gives associates another reason to stay, to be a part of making our company better-even if the competitor down the road is offering more money.