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.