Making the unachievable, achievable with financial education
4 min read
Jeff Miller, nudge’s US VP, was a keynote speaker at HR.com’s webcast and presented, "Making the Unachievable Achievable with Global Financial Education." Jeff set out to achieve three objectives through the insights he shared:
- Drive home the importance of, and the need for, financial wellbeing in the workplace. Especially for employers with global employees by offering an experience that’s globally equitable.
- Change the way employers think about global financial wellbeing and uncover what financial wellbeing really means, and change people's perception.
- Inspire employers to either revisit their financial wellbeing programs that they're offering now. Or if they're not doing anything in financial wellbeing, then encourage them to start a journey to offer financial wellbeing for their people.
What is financial wellbeing?
Financial wellbeing is a positive relationship with money, where individuals are in control of their finances, protected in emergencies, and have future financial goals. By developing financial knowledge, skills, and confidence you can achieve positive financial actions and ultimately reach a state of positive financial wellbeing. The reality is many individuals were not taught about money in school, so organizations need to provide foundational financial education to build the financial literacy of their workforce.
Why build workforce financial literacy?
Better financial literacy can have a positive impact across the business and economy. For example, financial literacy can reduce financial stress and increase happiness. This reduces absenteeism and increases engagement, productivity, and performance. Moreover, financial literacy helps employees understand workplace benefits, which need regular cadence throughout the year, not just during open enrollment.
Reward leaders’ financial wellbeing focuses for 2024
Jeff polled the audience of total reward leaders on their financial wellbeing focus for 2024. With options such as engaging with retirement plans, increasing awareness of benefits, addressing inflation, and navigating pay pressures. The audience selected a diverse range of priorities and demonstrated employers' growing recognition that employees need help in diverse areas of financial wellbeing.
2024 financial wellbeing outlook
With that in mind, having a clear view of the 2024 outlook is important to understand what could be impacting employees this year. That could be anything from geopolitical uncertainties, a record number of elections, the mainstream adoption of AI, the growing challenge of AI driven financial scams, and continued challenges related to inflation will affect both the global and domestic workforces. Domestically, the market, housing costs, rising childcare costs, student loan repayment, wages, and healthcare will be primary drivers of employee financial health like 2023. Data will be essential to navigate 2024 and beyond, and you can view the current financial health of the global workforce through – the global financial health pulse.
Global financial health pulse
Global financial health pulse insights are generated by the financial health scores of millions of global nudge users and highlight the ongoing financial challenges that individuals face, as well as the differing financial needs across the globe. For example, in Canada the financial health score is currently 68/100, a higher score that’s been maintained and higher in comparison to other countries. Overall, scores globally have been deteriorating. Variations in stock market investment rates, government support importance, and the absence of credit scores in some countries underscores the universal impact of finances on people, and the need for deeply personalized financial wellbeing programs. Here are the top US financial health trends that we’re noticing right now:
Financial challenges today
1. Childcare costs: emerge as a significant factor affecting financial wellbeing. The "Childcare Cliff," is where a $24 billion Covid subsidy ended, impacting childcare facilities and leading to potential closures or increased rates. The resulting increase in childcare costs is affecting parents financially, emphasizing the need for ongoing communication and support from employers beyond open enrollment periods.
2. Student loans: 40% of those starting repayment missed their first student loan payment, with average payments ranging from $250 to $500. There is a need for student loans education and the benefits for employers who support their workforce in this area.
3. Fair wages: Fair wages is a significant talking point in the compensation and benefit world. High inflation poses challenges for providing salary increases so employers can focus on highlighting their comprehensive benefit packages and providing total reward statements to employees.
4. Healthcare costs and debt: 41% of Americans carry health financial debt so it’s important to educate employees about healthcare plans, particularly health savings accounts (HSAs), as a powerful financial tool.
Building the case for a global financial wellbeing program
Organizations are successfully implementing global financial wellbeing programs. Expedia, with close to 15k employees globally, recognized the importance of addressing financial struggles and launched nudge, achieving significant engagement with 70% of its workforce. Veritas, facing attrition challenges, implemented nudge to improve benefit literacy, resulting in a 99% engagement rate. Meta (Facebook) focused on Latin America to combat financial anxiety and enhance awareness of stock plans.
Today, organizations can use financial education to address specific business needs and engage employees in a more personalized manner. Internal approval for a global financial wellbeing program means getting buy-in from decision-makers that financial wellbeing programs are necessary, even when other benefits are already in place and building a strong business case, using examples like Expedia, Veritas and Meta, are crucial for securing approval.
To conclude, implementing financial wellbeing programs is rewarding for businesses and has a guaranteed positive impact on employees' lives. nudge supports clients with resources to elevate their programs and to make the most of the platform. The 2024 Global financial wellbeing calendar is a resource that fosters ongoing program and benefit engagement.
Get in touch to find out more on how nudge can, help build a case for or support your global financial wellbeing program.