Worker financial literacy is an asset

We all want more productive employees. Getting more out of the people you already have is obviously far more cost-effective than hiring to pick up the slack. The question is how to squeeze blood from that proverbial rock.

One logical approach would be to analyse the main causes of workplace distraction for employees and then determine how to eliminate those distractions and ultimately get more done.

Studies have shown stress to be one of the leading causes of workplace distraction, forcing roughly people to miss work and costing businesses as much as billions of dollars in lost productivity each year.

Even when employees are present in body, they aren't always operating at full capacity. Sleep deprivation, for example, robs us of billions in productivity a year, according to Harvard Medical School.

You, therefore, have to wonder: What are the leading causes of stress?

Sixty-nine per cent of people say that money is their top stressor, according to American Psychological Association surveys, while 65 per cent blame work, 61 per cent point to the economy, and 57 per cent bring up family responsibilities.

So, to summarise, people are worried about their finances, and that worry is making them less effective in the workplace.

"Think about it," said Mitchell Weiss, a management consultant, serial entrepreneur and adjunct professor at the University of Hartford.

"If money's a worry - you don't have enough of it to go around, the bills are piling up, the collections companies have begun to call - how clearheaded would you be for the tasks at hand, particularly those that require creative thought?"

The magnitude of this issue shouldn't really be a surprise, considering how financially tumultuous recent years have been - as well as how shockingly poor financial literacy has become - but it is certainly worth addressing.

"From an organisation's perspective, it certainly makes sense to have a financially literate workforce," said Ryan Klinger, professor of management at Old Dominion University.

"Employees dealing with issues related to mismanaged finances are more likely to withdraw from their work ... Even worse, these same employees who find themselves in a financial hole may also be the least equipped to climb out of it."

With the problem diagnosed, employers who are concerned about the happiness and productivity of their workers have a clear course of action before them - to groom employees' money-management skills.

Doing so will not only improve workplace morale and the company's bottom line, but it also may make the company seem more attractive. If employees are having trouble making ends meet, you and the amount you are paying them will inevitably be to blame. Smarter financial decisions, on the other hand, lead to more disposable income, which in turn leads to the overall perception of being better paid.

Financial literacy will also lead current employees to make better financial decisions for your company and could even be used as a selling point to prospective employees if and when you decide to expand.

As is the trend with education in general, the best financial literacy programs stress critical thinking, problem solving, long-term planning and the acquisition of detailed information as it's needed during the course of daily life. In other words, don't try to teach your employees everything they'll ever need to know about bank accounts, budgeting, credit cards, debt, financing, insurance, investing, mortgages and everything in between. Instead, it is important that you impress upon them the core tenets of responsible money management and provide them access to reliable information sources moving forward.

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