When we discuss with corporates on educating their employees on Personal Finance, we do sense a feeling amongst a few corporates that it is the personal responsibility of the employee to take care of his / her Personal Finance. It is not communicated directly to us, but as I mentioned we could feel it.
On the face of it, the corporates may be right in their thinking, but look at the benefits that will accrue to the corporate by giving this basic education:
- Educating the employees on ‘Personal Finance’ is one of the most inexpensive methods to motivate the employees. That is why many organisations seem to think that it is a good tool to improve ‘Employee Engagement’.
- The employee’s family will develop positive feelings about the organisation. In fact, they will even tell the employee to put in more efforts.
- Without any hype or overwhelming even an employee without any accounting and finance background, will learn accounting terminologies such as income statement, balance sheet, asset, liability etc, which will improve the employee’s financial literacy. Over a period of time when the employee develops a kind of feel for numbers, he will be able to understand and manage his expenses. In other words, transition from ‘Personal Finance’ to ‘Corporate Finance’ will be a lot easier.
- The MIS (Management Information System) will be better utilised and understood. The inadequate use of the available information such as monthly accounts is a major problem in many organisations.
- When the employee takes up senior positions such as Profit Centre Head, this will come very handy.
The senior management can even spot employees with entrepreneurial flair with such a simple initiative as educating employees on Personal Finance. So this is not only a tool not only for improving ‘Employee Engagement’ but also for improving ‘Financial Literacy’. Thus, this is one of the classic cases of 80-20 rule; with 20 % efforts, the senior management can get 80 % results!
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