A more diverse workforce is leading to more workers whose native language is not English. Others may not have a firm grounding in financial literacy.
That has implications for employers: if employees encounter financial stress as a result of poor financial literacy, it can result in lower productivity and higher turnover.
And this doesn’t address employer-sponsored retirement plans. Employees with low financial literacy due to a language barrier are unlikely to be saving for their future in a retirement plan.
Plan sponsors need to be ready to go beyond the basics, providing multilingual communications and financial education to help improve the financial stability and long-term success of their employees, making them more financially literate, productive and loyal.
How to improve financial literacy and wellbeing
It’s important to recognize that a segment of these workers may live paycheck to paycheck, have low credit scores and are unlikely to recognize the benefit of long-term savings when they are deep in debt.
A lack of trust in financial services firms and the products and services they offer, including retirement savings plans, often compounds financial difficulties, especially among non-English speakers.
Consider offering the following services to improve financial literacy, financial wellbeing, retirement readiness, and ultimately, productivity and employee engagement:
- Multilingual communication and education: Make financial literacy programs available to employees in their own language, whether it’s Spanish, French, Mandarin or another language. Make sure translations of key words and phrases actually make sense. Literal word-for-word translations often don’t capture a language’s idioms and expressions. For that reason, try to have native speakers make presentations to non-English speaking employees.
- Multilingual, individual financial coaching: Those struggling with finances need to solve their immediate financial problems before they’re able to address the future. Providing multilingual coaching in basic money management will help employees focus on their current financial issues and set them up for a stronger future.
- Money-saving tools: Employees who don’t speak English may be unbanked and pay high fees to cash their paycheck. Steering them towards opening a bank account will help. Also, trying to get them off the high-interest credit card carousel through lower-interest consolidated loans will provide immediate financial relief.
- Student loan debt relief: English as a first language or not, there are some employees who may have fallen into student debt (whether or not they graduated). Employers can make matching contributions of up to 5% of an employee’s salary when that person puts at least 2% of their salary towards paying off a student loan. It’s important to communicate such programs in several languages, as employees may have student debt even though they are non-native English speakers.
The financial challenges of many employees who are from a different social, cultural, or socioeconomic background are usually complex enough to warrant a high level of employer commitment to multilingual education. But the additional time and resources spent will have a long-term return in higher productivity and engagement, and lower turnover and job dissatisfaction.
