Workplace Financial Education with Matt Hern

Why flexible working arrangements are under-utilised

2011-07-06T13:20:00.001+08:00

Over half of employers* believe that flexible working arrangements are a key factor in attracting and retaining employees.

And the employees agree - in fact well over half do.*

But do over half of your employees actually take advantage of the flexible arrangements you offer? Is it even close to the percentage that say they value it?

Ever wondered why that is the case?

It's because they can't afford to. Employees ideally want to work less while their children are young and have a sense of balance between work and life but they are committed to lifestyles that require full time incomes to sustain.

This is illustrated in the results of the 2011 MetLife Study of International Employee Benefits Trends:

The MetLife study agrees that over one-third of employees want more time off to spend with their family. But 45% are concerned about having enough money to make ends meet.

That begs the question: are they still working for you because they want to, or because they can't afford not to?

Financially stressed people don't make engaged, productive employees.

What to do

As an employer instead of throwing pay rises at your team that just fan the flames, consider teaching them how to get a more fulfilling lifestyle out of the money they have.

For example: host an in house series of my DIY Wealth Creation for Busy People course.

* Source: Mercer Benefits Outside the Square, 2008

Educate to their stage of competence

2011-05-31T13:01:00.000+08:00

When I'm asked to present to a group it is common that I am asked to give tips based on life stage. For example tips for people with young families.

That's an ok starting point but consider this: if they are hopeless with their money the recommendations for how to save for children's education will be useless. They don't have the financial competence to implement the recommendations.

No matter what stage in life you are it is your current level of financial competence that determines the strategies that are right for you right now.

So rather than creating a workplace program based around life stage create one based around their stage of enlightenment and competence.

You can start by creating a program around The Six Stages of Wealth Creation. Most people sit within the first three stages so you can quickly cover a lot of people. Watch my brief presentation below for an insight into the different stages of competence.

A great starter presentation in your organisation is one built around helping people identify their stage of competence. (For example my presentation "Money for Life".) Your follow-up programs can then be targeted to the needs of each stage. By doing so you'll get the right people in the room because they'll know where they are at.

The Six Stages of Wealth Creation

View more webinars from Empowered Wealth Pty Ltd

Article in HR Leader magazine

2011-03-08T12:50:00.002+08:00

This month's edition of HR Leader magazine features an article on workplace financial education. You can read a copy of the article here (March 2011).

On key point in the article in which I am quoted relates to how to effectively run a program so that the employer actually gets a benefit.

“What works well is when there is a homogenous group so that the content can be tailored to suit them,” says Hern. “Running generic seminars to a group of mixed people never works. You get completely mixed feedback and no one gets what they want out of it.”

Broaden Your Employee Assistance Plan

2009-10-13T14:04:00.011+08:00

"Sixteen percent of Australians with debt are finding it difficult to make their payments" according to the latest Australian Debt Study Report by Galaxy Research for Veda Advantage.

The research also found:

"More than one in ten (12%) of Australians have missed a required minimum payment in the past three months, with many missing two or more essential household payments."
"Of those Australians with a mortgage, 13% were late paying a household bill in the past three months"

Money is a taboo topic for many people, especially talking about financial difficulties. So you as a manager or employer probably won't have any idea when your team members are financially stressed.

Similarly you may not know when they are emotionally stressed. That is why you engage an Employee Assistance Plan (EAP) provider and promote it to your staff.

Do they know to call your EAP provider?
But does the promotion of your EAP make staff aware they can also call when they are financially stressed? If not many may not event consider calling this confidential service when they miss a mortgage repayment or household bill.

And even if they did call the Employee Assistance Plan (EAP) provider they may not get the help they need. This is since many EAP providers have psychological not financial backgrounds. About the best they can do is refer your financially stressed staff members to a financial counselling service.

"Fine, problem solved" part of you may be inclined to think. Not so.

Will they actually get the help they need?
Who pays for the service once the staff member is referred outside of your EAP provider? Does it stay confidential from you? If not, your staff member may be inclined not to take that next step.

Plus financial counselling services are not qualified, professional financial advisers. The help they can provide is limited.

Broaden your EAP offering
To ensure your valuable, but stressed staff get the urgent help they need with the confidentiality you both want you need to extend your formal employee assistance agreements outside of the traditional providers. You may need at least two providers: one traditional psychologically based, and one financially based.

It's a more urgent imperative than you think. Many calls to EAPs may be the result of relationship stress and breakdown. Research from Relationships Australia show that financial stress is the second largest contributor to relationship stress.

By providing a confidential financial component in your EAP you could be preventing many of the calls to your traditional provider.

Over half of Australians stress about money: new research

2009-07-13T14:14:00.002+08:00

Sixty-four percent of Australians are stressed about money (21% are highly stressed) according to a new study released today by Lifeline. Financial concerns are the second largest contributor to stress, with “work” being the largest factor.

Inevitably this financial stress is distracting your people, reducing their productivity and engagement and costing you.

Lifeline conducted the study in conjunction with Stress Down Day on Friday 24th July.

If your workplace is holding a “Stress Down” event to raise proceeds for Lifeline how about including a presentation that goes to the heart of one of the main causes of the stress – money?

You could host a luncheon seminar about reducing financial stress and provide sandwiches, while asking all attendees for a gold coin (or note) donation to Lifeline. It’s win-win-win:

You benefit by addressing an important engagement issue
Your people benefit by improving their wellbeing
Lifeline benefits through your donations and increased awareness

Go on, call your friendly financial educator now and book it. It’s worth doing even if you can’t hold it on Friday 24th.

Covey: financial stress drains productivity

2009-06-18T13:56:00.002+08:00

"Having spent my career helping individuals and corporations increase productivity, I've become convinced that one of the greatest, unnoticed drains on individual productivity is the distraction that financial stress puts on people."

Dr. Stephen R. Covey, Author of the 7 Habits of Highly Effective People

(As quoted in the newsletter of the PFEEF, 17th June 2009)

Wow them with a Financial Wellbeing Month

2009-04-24T14:45:00.004+08:00

Building your brand as an employer of choice is one of the employer benefits of investing in employee financial wellbeing. Since so few Australian companies have comprehensive financial wellbeing initiatives it clearly differentiates you from your competitors.

Every April in the USA is Financial Literacy Month, supported by Senate legislation. Judging by the amount of news articles that Google News has been sending me the entire month is full of events run by many of the federal and state government bodies plus private organisations. The large number of events makes you think “Wow, they really care about financial wellbeing.”

You can get a big boost in your brand as an employer of choice by wowing your employees in the same way. Declare a Financial Wellbeing Month and fill it with exciting, engaging events and opportunities for people to improve their financial wellbeing.

During your Financial Wellbeing Month you could:

Host a launch event for employees and their partners including a CEO address and a general education seminar
Include specific seminars tailored to life stage and financial interests
Provide on site brief educational chats with a financial planner (I call this Coffee Cup Coaching)
Distribute a company branded financial education magazine
Offer a voucher for subsidised financial advice for anyone who seeks personal financial advice during the month. (They can choose their own planner.)

The depth and breadth of opportunities offered in a short space of time is enough for our human nature to register the message: “my employer really cares about me.” Done well it should also have the wow factor that gets them talking about it to friends and industry peers, thereby building your brand.

You could even spread the message and build your employer brand further by:

Getting media coverage - this initiative is definitely news worthy
Sponsoring a community financial wellbeing event. Perfect for companies with regional offices.

If you want to build your brand as an employer of choice a Financial Wellbeing Month would not be your only initiative. It would support the participation in your ongoing program and give you the opportunity for the “shot in the arm” that puts a spring in their step and get’s them talking about how great you are to work for. Now, wouldn’t that be terrific?

To learn more about creating the initiatives you may include in your Financial Wellbeing Month contact me now.

Online education tools – Put them in their place

2009-04-08T12:19:00.003+08:00

Just because people can, will they?

The availability of online education has been fantastic in enabling more people to conveniently and cheaply get access to information. But there is a dark side – it can trick us into thinking that providing access to information online is enough to create change. Sadly, it doesn’t.

Reflect on this thought experiment: Has the explosion of health related information on the internet over the past 15 years made us fitter, slimmer and generally healthier overall?

When you implement an employee financial wellbeing program you need to match the services to the outcome you want to create.

If you truly want to increase employee wellbeing then you will need to help them sustainably change their behaviour to more positive behaviours and habits. To achieve this you’ll need a blend of services matched to the different stages of behavioural change.

Online education is one possible tool that you may include at the appropriate stage in your program. The advantages of such tools are often considered to include:

Scalable – so easy to deliver to many people without great cost increases
Always on – 24/7 at your convenience
Accessible anywhere there is a decent internet connection

These advantages can make online education appear to be low cost per person, which is attractive to organisations just starting out. But any cost is expensive if you, the employer don’t receive a benefit.

That brings us to one of the major disadvantages and challenges of online education: getting people to actually use it.

With regards to financial literacy and wellbeing the vast majority of adults are either not aware they have a problem or not sufficiently motivated to do what needs to be done to improve their wellbeing. So they won’t use an online education tool even if they know it exists. (They’re even less likely if you bombard them with reminders.)

Another disadvantage of online education is that it is extremely difficult to personalise and make it intuitive so that it presents the information an individual needs to overcome the resistance/obstacle to change they are experiencing at that very moment. It can’t replace the human touch that is required at those critical moments.

Mostly online education tools provide information to those already motivated to change. Sadly, that is a minority of your workforce. So online education has a valuable place, but it shouldn’t be your first step and nor should it be your only service in an employee financial wellbeing program.

The appropriate first step for your organisation will be guided by the employee engagement outcome you are targeting. If you want many people to benefit from the program then hit them where they are at - unconsciously incompetent. Plant seeds of awareness by including introductory articles in your regular company magazine or subscribe to a dedicated personal finance newsletter such as The Money Mentor.

The Hidden Profit Risk in Uncertain Times

2009-03-27T13:45:00.005+09:00

"The greatest risk to profits right now is plummeting workforce productivity – precisely when companies cannot afford it. The Australian workforce is afraid. They fear for their jobs and they fear for their financial security. This fear distracts them and reduces their productivity and that of their colleagues.

The challenge for companies is to avoid fuelling this fear by too frequently emphasising the negatives. Unfortunately, stock-exchange disclosure rules almost oblige public companies to do just that. Directors must not buy into this fear. Doing so will be a self-fulfilling prophecy that will bleed profits."

This is the first two paragraphs of one of my articles that was published in Company Director magazine in March 2009, the magazine for The Australian Institute of Company Directors.
Read the full text of this article here.

Stressed workers also present a legal headache

2009-03-25T12:40:00.005+09:00

The global economic down turn is causing a lot of anxiety in the work force. Even for households where nothing has practically changed their perception has altered and they too are feeling stressed. Not only does this reduce productivity and disengages them, now it has been revealed that employers face a legal issue.

"employers can face an increase in their workers' compensation premiums, and will see productivity suffer due to higher employee absenteeism and low morale", said Greg Robertson, general counsel for Harmers Workplace Lawyer in an article in the Courier Mail on Sunday 22nd March 2009. (Read the article here or here)

The article goes on to say: "Part of an employer's common law duty of care to their employees is to take reasonable care of the safety of the employees.

This includes an obligation to take reasonable care of the mental health of employees."

You may feel that the bottom line benefits of workplace financial education are difficult to measure but evidence of the need and intangible benefits is undeniable. If you have been considering a program for some time it just may be a legal imperative to act now.

Australian Employers Investing in Workplace Financial Literacy

2009-01-28T10:42:00.006+09:00

There are some Australian companies who have lead the way in financially educating their employees. This article published in Financial Standard in May 2007 highlights several Australian companies identified by the Australian Financial Literacy Foundation.

One interesting point is that Flight Centre provide compulsory financial planning and even have an in house financial planning division. "The enterprise policy was introduced after they found financially secure workers were more productive", notes the article authors.

Engaging employees during a financial crisis

2009-01-28T10:10:00.004+09:00

A financial crisis, recession, economic down turn or whatever pollies are calling it can be disastrous for your business in a way that is easily overlooked. The doom and gloom can quickly disengage and distract employees causing your productivity to plummet at a time when you cannot afford it.

James Adonis, leading international expert and author on employee engagement has published this insightful e-book "Engaging Employees During A Financial Crisis".

James' very first suggestion is to educate people on their finances. This makes sense since fear of financial security creates a significant distraction as it strikes at the core of our hierarchy of needs as suggested by Maslow. We must deal with this primary need of employees before we can move to engaging them at higher levels and needs.

Engagement Economics

2009-01-19T12:06:00.006+09:00

Employee engagement expert Ian Hutchinson, recently published this brief article in his newsletter. I recommend you check out his website and the return on investment calculator.

Turnover is increasingly becoming one of the primary expenses for businesses due to additional hiring, lost productivity and retraining costs. Many researchers suggest turnover costs companies between one and two times an employee's salary in lost productivity. For an organisation of 1000 employees with an average salary of $60,000 and 22 per cent turnover, this equates to around $15,800,000 annually in lost productivity. Reduce turnover by just 2 per cent by engaging people and you could save your business over $1.4 million p.a.

ISSUE: Employee engagement can now be illustrated by HR as a profit centre

For more information go to Engagement Economics

Australian employers - slow to innovate?

2009-01-16T12:07:00.004+09:00

A recent survey of employers conducted by the International Foundation of Employee Benefit Plans found that 43% of U.S. respondents offer financial literacy education programs for their workers. (Source: International Foundation of Employee Benefit Plans, Nov 25, 2008 as quoted in PFEEF newsletter, Jan 14, 2009)

Many Australian companies include "innovative" in their corporate values or mission statements. Yet I would be very surprised if even 4.3% of Australian employers offered financial literacy eduction programs in their work places

American companies have been offering these programs for decades and robust research about the bottom line benefits was published over a decade ago.

So, why is it that Australian companies on the whole have been so slow to demonstrate innovation and implement comprehensive financial education programs?

And just in case you are thinking it...no, a once or twice a year seminar by your employer superannuation fund provider does not count as a program; especially if the main topic is their superannuation product and how to contribute more into it.

Financial Education The Antidote For Distracted Employees

2009-01-14T15:17:00.000+09:00

With the economic news as it was in 2008 many employers would have found that employee productivity and engagement plummeted along with the stock market, precisely when they could least afford it.

Employers need to address the distraction of the gloomy economic news if they are to re-engage employees and stop them standing around the water cooler talking about their concerns.

For ideas on what employers can do to boost productivity and engagement among distracted and stressed employees read the attached article "Education On The Money".

This article was first published in the December 2008 / January 2009 edition of HR Monthly, the magazine of the Australian Human Resources Institute (pub. Hardie Grant.)

Welcome

2009-01-07T21:03:00.011+09:00

Hi, I'm Matt Hern, Financial Educator and Adviser.

I am passionate about helping people afford to forever live their lifestyle dreams.

One of my favourite ways of doing that is through education, whether that be 1-on-1, at conferences and events, or in the workplace.

In the past 3 years since I started my own business I have collected a lot of research and experience about the value to employers of investing in the financial well being of their employees. This information continues to grow rapidly as society wakes up to the problems of low financial literacy and employers realise the significant impacts on employee productivity, retention and engagement.

My aim for this site is to be the premier resource for Australian employers to learn how to implement a financial literacy education program in their workplace and ensure they receive the bottom line benefits they need.

The key is that I will focus on implementation, not theory. Employers (CEOs and Human Resources professionals) can sit back and allow me to digest all of the research, surveys and literature and translate it into practical impacts and actions.

To learn more about me and my educational programs please visit my main website here.

Yours in prosperity,