Previously (in 9 Workplace Trends Worth Knowing,) Ira Wolfe wrote about the troubling statistic between recent graduates (Millennials) and their preparedness for professional environments. Specifically it was stated that four out of five CEOs worry about the availability of key skills, and that only 45 percent of young people believe they’re prepared to enter the workforce.
For the most part, these pieces of data are referring directly to young people’s often inadequate preparation for jobs and career growth, and this is something that CEOs and senior employees can help with to some extent. That is to say, programs can be implemented and Millennials can be coached so that they may catch up and succeed in their careers. However, the idea that young people aren’t always ready for the workforce doesn’t solely concern performance in the office. The same problem exists on a more personal level for many young employees in that many simply aren’t ready for the financial management that comes with securing a job and salary.
If that doesn’t sound like a problem that could negatively impact a workplace, think again. According to a 2012 survey conducted by Fidelity Investments, 78 percent of employers say “concerns over financial problems can have a negative impact on employee productivity.” That statistic comes on the heels of a number of troubling findings about the financial literacy of American employees in general, though it’s only natural that the problems are more concerning with younger employees.
So how can small business owners and managers help ensure a young employee’s financial future instead of unfortunate fate?
Well, the best solution may be to set up some sort of course or training to educate employees on the basic financial skill sets and understanding they’ll need to succeed. Here are a few ideas that can make for a good start.
- Confirm the advantages of savings vs. paying off debts. One of the biggest challenges facing Millennials entering the job market these days is the mountain of student loan debt so many are buried beneath. Debt can be a constant source of stress, and in ways it becomes even trickier to deal with once you have income, because a new problem arises: how much money should you save, and how much should you allocate for paying off debts? S. News & World Report provided a very helpful worksheet for addressing these questions. It’s a helpful resource for young professionals struggling with all this.
- Discuss the very basics of investment. For the young and even many more mature employees, investment can be confusing and complex. It may be a difficult concept to understand and implement especially for many young people coming right out of college and joining the workforce for the first time,. Providing a basic guide to how the market works and how investments are conducted can make a world of difference to a young employee. FXCM offers an outline of the New York Stock Exchange’s history and functionality that can be a terrific starting point while serving as the foundation for more specific financial strategy.
- Provide a simplified explanation of how employment will affect the employee financially. For young employees not used to filling out forms with information on everything from health insurance to retirement funds, the whole process can be a bit overwhelming. Also, the forms themselves sometimes seem almost as if they’re designed to confuse. The fine print is necessary, but to help any employee – regardless of age – fully grasp and embrace financial commitments and benefits associated with a new job, providing a simplified explanation can be extraordinarily helpful. This allows the employee to understand where he or she stands with income and investment, so as to better address personal financial decisions.
In the end, a small business owner or CEO can only go so far in helping new and young employees to become more financially literate. Unfortunately, though, it’s a reality in much of America that Millennials are often unprepared not just for the workforce but for their own financial planning. Helping them to get off on the right foot in this regard can go a long way toward improving productivity and promoting ease of mind in the workplace.
Special thanks to Jenna Batten, a freelance writer based just outside of Baltimore, for submitting this post. She enjoys covering topics related to financial management and investing.