Money in the Workplace: Let’s Give Them Something to Talk About. Hubris is not a viable financial planning strategy. In America, we pretend to be more financially literate than we are. We can get away with it because in many cases, mum’s the word when it comes to talking about money.
The Aegon Retirement Readiness survey which includes 14,400 workers and 1,600 retirees in 15 countries, found that 69% of Americans claimed they were able or very able to understand retirement financial matters. However, just 31% correctly answered three basic financial literacy questions. In other words, we’re making a big show of our knowledge of dollars and cents, but when it comes to putting our money where our mouth is, we’re not able to make much sense of it at all.
Is our lack of preparation for retirement due in large part to bravado and an unwillingness to admit our — for lack of a better word — ignorance when it comes to money matters? If that’s true, we have our work cut out for us when it comes to moving the needle on financial acumen. What’s more, how do employers overcome workers’ unwillingness, consciously or unconsciously, to admit that they don’t know what they don’t know?
The Birkman personality test administered at TRAU by UCLA professionals, the goal is to enlighten people not just about how they perceive themselves, but how others see them. In other words, a realistic view. People start by moving from being unconsciously incompetent to consciously competent. Which is at times the hardest step to take. Eventually, we become consciously competent ending with unconsciously competent.
But the debate about financial literacy and wellness centers around three issues:
- Does it work? Academic research says that it changes the behavior of 0.1%. So, no, not currently.
- Do employers have the obligation to provide financial wellness at work?
- What’s their incentive if they do? What’s in it for them?
All this is to say, if as a plan sponsor, you want to help your employees open up and become more comfortable with money and all of its complexities, the best thing you can do for them is start a conversation.
And whether that’s a gentle nudge through email or some other mode of communication, or a group meeting, or a lunch and learn, or a one-on-one meeting with your plan’s advisor, if you can get them to talk about money and acknowledge that perhaps they don’t know as much as they think they do — or pretend to, anyway — you can help make a difference. This is not a change that will happen overnight. It may take many attempts to drag some employees kicking and screaming (hopefully not literally) out of their comfort zone, but it’s a necessary step in the process to move us from financially fearful to fiscally powerful.
To be sure, perpetuating our attitude of bravado and false confidence isn’t going to get us there. So what do you say? To quote the inimitable singer Bonnie Raitt, let’s give them something to talk about.