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:
- 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.
- 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.
- 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.