Having a more financially knowledgeable workforce will help them, and your business
Speak to any entrepreneur, and they will tell you that investing in their team’s development is vital to the growth of their business. There is a war for top talent in Canada, and this is one way to attract them. In my experience, the most talented people choose the companies at which they believe they’ll learn and grow the fastest. While it’s important to help them master technical skills or learn to lead others, there’s another skill we should be teaching them: financial literacy.
When James Laird and I launched Ratehub.ca in 2010, we wanted to help Canadians make smarter financial decisions by allowing them to compare such financial products as mortgage rates, credit cards and deposits. But we were surprised to learn just how many Canadians lack confidence in managing their money.
According to Statistics Canada’s 2014 Canadian Financial Capability Survey, only 31 per cent of women and 43 per cent of men consider themselves financially knowledgeable. That means more than half of Canadians are uncertain about their financial futures, and that’s unacceptable.
With November being Financial Literacy Month, it’s a good time to consider what we as employers can do to help our teams get more comfortable with managing their money. Not only will we share valuable life skills, having a more financially knowledgeable workforce will help our businesses flourish, as we have found at our company. Here’s what we’ve learned about teaching our team about financial literacy, and how our business has benefitted.
Start with the basics
What do they know about building a budget? Do they use one to track what money’s coming in and going out every month?
What about interest? Does your team understand that having debt means paying interest each month, and that they should pay more than the minimum amount due on their credit cards? And when it comes to saving, do they understand where they should put their funds – an RRSP, a TFSA or something else?
These concepts may sound simple, but for many employees, particularly recent graduates, they can be daunting. By spending time on these areas with your team, you will demonstrate you care about their financial wellbeing – and help them build skills they’ll use throughout their lives.
Help your team understand your company’s business model
Once you’re confident your team has a grasp of the basics of personal finance, be transparent about your company’s business model, what its largest revenue streams are, and how their work directly affects the company’s bottom line. This is an opportunity for your business to benefit from your team’s knowledge of financial literacy.
At Ratehub.ca, we work with banks, credit unions, lenders and other types of financial institutions, so we spend a lot of time teaching our team about the financial industry. As part of the onboarding process, we ask our new hires to put together brief presentations showing what they’ve learned about personal finance and about our business model. We also hold quarterly meetings showing the progress behind our operational goals and how those translate into revenue growth. Educating our staff on financial literacy has been hugely beneficial – our team of more than 50 employees continues to achieve double-digit growth, even after eight years.
I’ve found our employees really crave information and insight into the success and performance of the business. The more you can share with your team, the more connected they are with the business’ results. I’ve also found that employees who have a strong grasp of personal finance can apply those skills. Effective savers, for example, find ways to trim expenses.
Encourage your team to use their skills by giving back
Understanding personal finance can be extremely empowering, and that power should be shared with others. To that end, we’ve encouraged our team to get involved in improving personal finance knowledge within our community.
For example, we’re proud to co-host the Canadian Personal Finance Conference, an event open to anyone who wants to learn more about financial literacy and money-management skills. This year’s conference, which runs Nov. 25 and 26 in Toronto, holds special significance for me as it features an all-women lineup of speakers and financial experts. In addition, several of our staff members will volunteer at Hacking Good Toronto, a hackathon that aims to accelerate financial literacy among Canadian youth.
Once your team demonstrates a solid grasp of personal finance concepts, look for opportunities to enable them to teach others. By giving your team the ability to pass on their knowledge of personal finance, you’re benefitting the community – and you’re helping your team further solidify their own understanding of money management.
As entrepreneurs and employers, our companies are only as strong as our employees and the skills, talent and dedication they bring each day. We need to invest in our people – and by building up our teams’ financial literacy, we are absolutely building our businesses.