5 ways to reimagine financial education at work
When it comes to financial literacy, experience is the best teacher. Many adults don't start thinking about their finances until it's time to buy real estate, save for an emergency or choose investments.
Conventional financial education has its limits
Unlike younger people, adults acquire financial knowledge based on their immediate needs. They’re more interested in practice than theory.
That's what a number of scientific studies1 gathered by Desjardins's Financial Empowerment Centre of Expertise have shown.
Keep in mind that financial literacy2 isn't just about acquiring the knowledge and skills required to make informed financial decisions—it’s also a way for people to become financially empowered. Financial literacy and financial empowerment go hand in hand. And yet, according to the Financial Empowerment Centre of Expertise, only 45% of adults feel that they're getting the help they need on the road to financial empowerment.3
A new approach to learning
In light of this information, what options and resources can employees be offered? It might be interesting to think of employers as champions of financial literacy. In fact, that's exactly what 83% of Canadian workers ages 31 to 49 would like to see. They think their employers should play a role in their financial well-being.4 And research does show that employer-sponsored financial education tends to improve employees' financial literacy.5 That said, it's still important to offer the right tool to the right person at the right time.
"Culture eats strategy for breakfast"6
Making sure financial literacy is a part of your corporate culture should be a top priority. Investing in training and education is key for any employer looking to achieve results. The training also needs to be engaging and accessible.
Some of our Group Retirement Savings professionals shared their ideas on how to help plan members engage in active learning and better support them on the road to financial wellness.
Here’s what they had to say:
1. Make sure you understand what your employees really need
If you want your employees to succeed, you have to understand what they need. Consider creating surveys and scheduling meetings to learn more about their financial skills, goals and challenges, and what money-related topics they'd like to know more about.
"Some plan sponsors send annual surveys to their employees to gauge their needs and expectations about what they're hoping to learn. It's a great way to find out more about their financial situation and skills so we can analyze their needs and give them the right educational solutions at the right time."
– David Charland, Senior Manager, Business Development - Group Retirement Savings, Desjardins Insurance
2. Adapting training content to your business
Employees' identities and backgrounds often affect their needs when it comes to financial education. Employers need to make sure their group retirement savings provider fully understands where their employees are coming from to make sure their content is a good fit. For example, newcomers will have different needs than employees who've been living in Canada for a long time. You might also want to work with your group retirement savings partner to provide financial training in your employees' first language.
"We want to make sure we're able to adapt to the reality of the business, its employees and even their circumstances. For example, we have training sessions for newcomers to explain the Canadian retirement system, and others to tell them about their employer's group benefits. After each session, we sit down with them to make sure they’ve gotten what they need so they can make informed financial decisions."
- Charles Pépin, Section Manager, Advisory Services and Guidance - Group Retirement Savings, Desjardins Insurance
3. Provide a variety of resources at the right time
You can proactively tailor your plan and everything it offers to your workforce’s needs to make sure your employees have access to the resources and support they need when they need it.
Your group retirement savings partner probably sends out targeted communications to encourage employees to join their plan. You can go a step further by providing your employees with helpful resources when they experience a life event like welcoming a child, buying a home or losing a loved one. Employers are in the best position to take these kinds of initiatives, since they know their people.
You might also consider making learning fun by organizing special days for employees, like a dedicated Financial Health Day or Week. "I've seen sponsors organize these kinds of events—they're a great way to bolster employee engagement," says Charland.
4. Use networking to encourage employees to adopt good financial habits
Research shows that adults usually turn to their immediate environment (the internet, friends and colleagues) for advice when they have pressing financial needs.7 Discussion groups can be a great way to network, develop good habits and make informed financial decisions at work and elsewhere.
"People tend to adopt the same financial behaviours as colleagues, family members and friends who have more experience. In the workplace, more experienced employees and colleagues who are approaching retirement could spend time with newer employees to encourage them to enroll in the group savings plan, maximize their contributions and build relationships, which is so important."
– Charles Pépin, Section Manager, Advisory Services and Guidance - Group Retirement Savings, Desjardins Insurance
5. Offer rewards to generate interest
Finally, to encourage employees to take the first steps on the path to financial literacy, you could consider holding contests with draws around an educational theme. The goal would be to show that as an employer, you care about your employees' financial literacy, and you want to help them stay current in a changing world. "It always works," says Pépin. "And it's important that these initiatives come from the plan sponsor, because people are much more likely to open and read an email from their employer than something from an external provider."
As you can see, there's more than one way to support your employees' financial literacy. The important thing is to remember that everyone is unique, and everyone has their own way of learning. Even more importantly, you should have a good idea of what your employees know so you can adopt a strategy that meets their needs. It's a process, and your retirement savings partner can help.
For more information, please contact us.
1. Suzanne Bartholomae, Jonathan J. Fox., Overview of financial education, from The Routledge Handbook of Financial Literacy, 31 dec 2021
3. Online survey of 4,167 Canadians ages 18 and up, June 2022, Desjardins
4. Desjardins Insurance, Quantitative Study of Overall Wellness by Ad Hoc Research for Desjardins, December 2022. Survey of 2,000 respondents ages 18 and up, living in Canada, including both members and non-members of Desjardins.
5. Policy handbook on financial education in the workplace, OCDE, 2022
6. "Culture eats strategy for breakfast" – Peter Drucker
7. Suzanne Bartholomae, D. Elizabeth Kiss, Maria Pippidis, Financial Education for Adults, Effective practices and some recommendations, from The Routledge Handbook of Financial Literacy,Edited by G. Nicolini & B.J. Cude, 2021