By Odysseas Papadimitriou
McClatchy-Tribune News Service.
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 analyze 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 1 million people to miss work each day and costing businesses as much as $300 billion 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 $63.2 billion in productivity a year, according to Harvard Medical School.
You therefore have to wonder: What are the leading causes of stress? Sixty-nine percent of people say that money is their top stressor, according to American Psychological Association surveys, while 65 percent blame work, 61 percent point to the economy, and 57 percent bring up family responsibilities.
So, to summarize, people are worried about their finances, and that worry is making them less effective in the workplace.
“Think about it,” said Mitchell D. 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 in this country has become, but it is certainly worth addressing.
“From an organization’s perspective, it certainly makes sense to have a financially literate workforce,” said Ryan L. 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 now diagnosed, employers who are concerned about the happiness and productivity of their employees have a clear course of action before them.
We need to groom our employees’ money-management skills.
Doing so will not only improve workplace morale and your company’s bottom line, but it also may make your current benefits package 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.
I surveyed an array of financial-literacy, management and time-management experts for advice on exactly how to implement and maximize the value of such a workplace financial literacy program. Here’s what I learned.
-Outsource the program: “Smaller organizations might look to outsource financial literacy training,” Klinger said. Various massive open online courses offer free financial literacy courses, and Klinger said that such courses “can be rolled into new employment orientation sessions or current employees could be offered incentives for completing online courses.”
-Leverage your service providers: Not every small-business owner is a personal finance whiz. That means you’ll likely have to find an expert who is qualified to provide financial advice to your employees. You needn’t look too far, however.
“If the talent for this doesn’t reside internally, then I’d look to the company’s bankers,” Weiss said. “After all, they’re the ones who are most familiar with these matters, and the odds are they have curricula and collateral material in place.”
-Have someone available for a casual chat: Seminars, webinars and the like are great, but money is a very personal topic that demands personal interaction. Simply having someone available who can listen to your concerns and give personalized advice is therefore extremely valuable from both an on-time-learning and peace-of-mind perspective.
“I think it does boost morale when employees have someone on site to meet with,” said Dean Obenauer, assistant director of financial aid for financial literacy at Creighton University. “My role is not to judge, but help find resources and solutions.”
-Devise an incentive plan: Financial literacy programs won’t make up for well-below-average pay or core benefits, but it can be integrated into such areas and used to promote less tangible perks.
“If they are viewed as opportunities to better oneself, to receive more education or training, that may have a greater potential to be beneficial than if they are used as a substitute for other expected incentives,” said Megan W. Gerhardt, director of the Buck Rodgers Business Leadership Program at Miami University in Ohio and associate editor of the Journal of Leadership and Organizational Studies.
“However, the effectiveness of such programs to boost morale, increase satisfaction, or even serve as a way to attract new talent, depends largely on the importance and value employees (and potential employees) attach to such a program.”
In other words, financial literacy programs are ultimately a microcosm for the idea that as long as business owners are focused on providing value, whether it be to the consumer or the employee, the payoff will follow.
ABOUT THE WRITER
Odysseas Papadimitriou is CEO of the credit card comparison website CardHub.com and the personal finance social network WalletHub.com.