In this exclusive, Nick Pollard, Managing Director, Asia Pacific, CFA Institute delves into the importance of financial literacy in the modern workplace.
The role of HR has been evolving – from being heavily administration-focused to gaining a seat on the board and becoming a partner/counsellor to businesses. With the expansion of the role, HR professionals are now working closely with various stakeholders in the company, such as those in finance, sales, and marketing.
This means having the ability to speak the language of business, i.e. financial literacy, is integral for HR leaders – to better communicate and collaborate with different parties, make better business and people decisions and suggestions, and eventually, bring greater and better value to the businesses.
Not only for HR, financial knowledge and skills are also essential to employees. According to PwC's Employee Financial Wellness Survey, more than three-quarters (76%) of stressed employees said financial worries have had a negative impact on their productivity. Moreover, financially-stressed employees are twice as likely to look for new jobs.
In this exclusive, Nick Pollard, Managing Director, Asia Pacific, CFA Institute (pictured below) delves into the importance of financial literacy in the modern workplace with HRO’s Tracy Chan.
Q: How important is financial literacy for HR leaders? How do these skills and knowledge help HR leaders to be better business partners for companies?
With the global race to attract and retain talent, HR is very much at the heart of an organisation’s strategy, and plays a key role in creating value in an organisation. As a partner in the business, an HR professional’s job is to maximise the effectiveness of people to deliver results.
Financial literacy is an integral ability for HR leaders, as it enables more sound decisions to be made about retaining, developing, and deploying appropriate resources to execute corporate strategies.
Successful companies put their people first, so HR professionals must understand the business, and understand the financial position of the company, in order to be able to attract and retain top employees.
Q: Could you share the financial principles that all HR managers should know in today’s business landscape?
Key to any successful HR strategy is financial intelligence, which is essentially the knowledge and skills gained from reviewing financial reports and using the information to understand the company's strengths and weaknesses, and to make decisions.
The HR team should be able to understand and explain how the company makes money, how its people will contribute to the company's profitability, the business impact of HR programmes, the business impact of employee turnover and restructuring, and the investment plan for employee development as well as any additional resources.
Successful HR professionals who possess a thorough understanding of the strategy behind a company's hiring in the context of market forces and industry trends, can interpret and translate business objectives into actionable strategies to hire, train, upskill, and retain employees.
Q: Financial wellness has become an increasingly important topic for employees. How does upskilling people with financial knowledge help boost employee engagement, retention, productivity and job satisfaction?
Financial wellbeing in the workplace is about how employees feel about and manage their finances at home and in the office. Employees who have peace of mind about their personal finances tend to be more enthused, engaged and focused at work, and are less likely to be distracted by matters that might otherwise affect their emotions and physical wellbeing.
As an essential component of any HR strategy, financial wellness is more than just salary and employee benefits. It is about creating an environment that supports employees to be financially secure.
This is an important tool to retain and attract top talent. One of the most effective ways to help employees with their financial wellbeing, is through financial education.
Q: What role should business leaders and HR managers play to improve employees’ financial literacy?
A knowledge gap in financial literacy can and will significantly impact an employee’s life, including productivity, on-the-job performance, health, and morale. Introducing programmes is an important way to boost employee retention and engagement, and can help employees to increase their job satisfaction and productivity.
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Photo / Provided [Nick Pollard, Managing Director, Asia Pacific, CFA Institute]