5 tips for leveraging payroll to promote financial literacy
Today’s employees increasingly rely on their employer to serve as more than just a paycheck source.
A global pandemic is compounding financial stress on employees across the world. With prospective employees navigating their return to the office, and businesses feverishly defending their turf amid the Great Resignation, savvy employers are looking for ways to integrate financial wellness programs into their current benefit plans.
Today’s employees increasingly rely on their employer to serve as more than just a paycheck source. Instead, employees expect their employer to be a trusted source of guidance on the best ways to optimize income. This is critical because employees who are distracted by financial stress spend too much of their workday worrying about money, which reduces productivity. Much of that stress can be traced back to a simple but profound cause: a lack of financial literacy.
Related: Financial stress costs U.S. companies $4.7 billion per week
At Fiserv, we work to integrate financial literacy programming directly into the payroll solutions we provide our clients, enabling organizations to deliver efficient payments alongside enriching content that educates and empowers the employee to make sound financial decisions.
Reflecting on successful financial literacy programs in which we’ve had a hand and the feedback we’ve received, here are five tips for using your payroll program to promote financial literacy in the workplace.
1. Keep it simple
Financial planning can be overwhelming. Unless you are trained in accounting or economics, the options available to manage personal finances can be confusing. Employers can help increase employee financial confidence by providing a single, turnkey platform that offers the employee complete visibility into their earnings with tools to customize and manage a monthly budget. Consolidate money management tools behind one convenient interface to prevent the lost time, questions, and headaches that come with the use of multiple systems or applications.
2. Engage early and often
Starting with new hire orientation, help employees fully understand their payroll choices, how they can lever financial benefits and savings options, and how payroll delivery methods like Earned Wage Access may benefit them. Also, be sure to offer programs that support new hires and provide employees financial insights and guidance throughout the year. This helps employees learn how financial needs can fluctuate over time and adjust to life changes such as getting married, the birth of a child, and paying for college.
3. Incentivise positive actions
While offering guidance is helpful, it’s also important to empower employees to make intelligent financial decisions. Embedding financial literacy content within your payroll portal or a financial app helps deliver guidance to employees when viewing or managing their money. This educational content could help provide smart money tips and even incentives for setting goals or reaching savings milestones.
4. Help employees navigate pitfalls
Employees who are less savvy at managing finances are more likely to fall into traps, such as identity theft or financial fraud. Understanding the basics of securing personally identifiable information (PII) is core to financial wellbeing. Additionally, simple budgeting tools can help employees identify and avoid unhealthy spending patterns and proactively plan their finances to avoid overspending.
5. Ensure financial inclusion
Employees may not have access to a traditional bank account or other tools. As such, employers can take measures to ensure their payroll solutions enable unbanked and underbanked team members with greater financial access. This can be done through a prepaid account that provides access to a debit card, an account to save money, and a mobile app that puts money management tools in the palm of their hands.
Leveraging technology to improve and support employees’ financial literacy directly impacts business results. In addition to helping employees manage their finances and reduce stress, employers who deploy integrated digital payroll platforms report reduced payroll administration costs and risks, increased engagement and productivity and decreased absenteeism and turnover. Integrated digital payroll platforms can also ensure employers deliver uninterrupted pay during a crisis like the pandemic that could otherwise slow or shut down payroll operations.
The biggest benefits to empowering employees to make solid financial decisions center on stress reduction and long-term financial strength. Building a solid financial foundation can help employees plan for the future, reduce debt, and promote self-reliance.
When companies lean into their employees’ financial well-being, everybody wins.
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