Funny enough, many employers don’t think that they should worry about their employees’ finances. Forget about your ordinary employees. Just think about your highly skilled and trained ones. Would you rather lose them because they’re bad with money? When you don’t teach them about their finances, you’ll soon face a scenario where you will have to choose between letting this employee go or letting him/her borrow money from the company.
Money problems are red flags. When an employee asks you for an advance, seriously consider if this employee is worth keeping in the future. Is it for a medical emergency? Is it to pay for credit card debts? Medical emergencies are good reasons, but credit card debts? You might want to rethink if the employee deserves a spot in your company or if he/she is a potential problem.
Of course, you can always take a risk. Make a bet. You can train your employees about money. Handling finances is not something that people are born innately with but if you train them enough, you’ll be surprised how productive many of them can be. Given the chance, most people will want to change their money habits and have better and more financially stable futures.
Open Two Kinds of Accounts for Them
When you hire them, open two types of accounts for them. One is for their salary and the other one is for their savings. Ask them if they want the company to directly deposit a portion of their salary into the second online bank account. Or, you can also advise them to transfer a portion of their salary to that second account. Ask them to make this a habit. The moment they received their salaries, transfer what they can into the other account.
Enroll Them in a 401K Upon Hiring
Usually, employers will hand new employees a packet of papers so that they can enroll in a 401K program. But for you, automatically enroll them in the program. They can opt out of it later, but at least they don’t waste time not being enrolled in the program. The 401K is a retirement fund. They can add to this fund whenever they have extra money so that they’ll have a more comfortable retirement.
Another way to encourage them to save more is to give them a bonus when they deposit their tax refund or company bonus into their 401K. This will entice them to save more. Once the money is in their 401K accounts, they can’t easily take out that money. There will be a penalty, so you don’t have to worry about them withdrawing money from the fund.
Host Financial Wellness Seminars
If you want your employees to save, you have to teach them how to do it. Don’t worry since you will also benefit from these financial wellness programs. Partner with financial advisors and organize seminars and workshops for your employees. Take the time out for this. If possible, don’t let them sacrifice their weekends, or they will not be focused on the seminar. Let them take the day off so that they are not going to be worried about other things.
But before you begin organizing these financial wellness programs, you have to know what matters to your employees. Create an internal survey. What does financial wellness mean to them? For example, most employees will want not to be stressed about their finances, want to be debt-free, want to have enough money not to be worried about their expenses, and have the financial freedom to enjoy life. Next to those comes being able to meet their daily expenses and being able to retire when they want to.
Help Reduce Costs for Them
Look for ways to help your employees manage their daily expenses. There are many simple things that you can do: give them incentives to use public transportation and set up a comfortable lunchroom so there’s space for employees to take their lunch. Instead of them running to the nearest fast food, they can grab a healthy lunch or make their own. That will save them a lot of money in a month. You can also encourage a flexible work schedule, so your employees don’t have to go to the office every day.
Doesn’t it feel good to see your employees better manage their finances? Don’t you want them to retire early and watch them live comfortably than when you hired them? When your employees are in a better place in their lives, they will also better understand how to run the company. You will also be giving them skills that they can apply beyond the company.