Workers need more help with financial knowledge than ever

Fact: Just 13% of employers say their employees are “very financially literate.” 

That’s just one startling stat from the Society for Human Resource Management’s (SHRM) “2014 Employee Financial Stress” survey.

According to SHRM’s survey:

“The majority (70%) of HR professionals report employees as being ‘somewhat financially literate.’ Thirteen percent describe their employees as ‘very financially literate,’ but 17% are considered ‘not at all financially literate.’

“Organizations with a smaller proportion of hourly employees were more likely to have employees rated as ‘very financially literate,’ whereas organizations with a greater proportion of hourly employees were more likely to have employees rated as ‘not at all financially literate.”

The survey indicates this pattern holds for a variety of industries.

Who needs help the most?

Employees with shaky knowledge of financial matters may not understand why certain deductions were made from their paychecks or what a tax that isn’t spelled out is for.

Here are three ways Finance staffers can help explain questions and concerns, and in so doing improve workers’ financial literacy:

1. Keep it simple and as short as possible. Use conversational language where you can. Where acronyms are necessary – such as FICA – make sure they’re spelled out in the first mention.
2. Use visuals. Most people have an easier time processing info when it’s presented with pictures. Charts and graphs can be helpful tools in your explanations.
3. Get a fresh set of eyes. Have someone who doesn’t work in Finance/Accounting/Payroll read any written communication, and ask the person for a summary so you’ll know if it gets the point across.