Financial Literacy at Work: Are We Doing Enough to Help Employees Make the Most of What We Offer?

Every year, when Financial Literacy Awareness Month comes around, the focus tends to be the same: helping employees “get better with money.” Workshops, guides, and awareness campaigns are well-intentioned, but often miss something more fundamental.

In most organizations today, the issue isn’t employees’ lack of a general understanding of finance. They do, however, find it hard to navigate the systems we’ve built for them at work.

There is often an implicit assumption that once employee benefit programs are in place, employees will be able to navigate them effectively. In reality, a meaningful portion of the value embedded in these programs is never fully realised, because the experience of using them is too complex, too unclear, or too disconnected from how people make their financial decisions.

This matters even more now as workforce pressures are changing. Ageing employees, caregiving demands faced by the younger people, and growing financial strain across income levels are pushing organizations to view financial wellness less as a benefits category and more as a strategic part of workforce support. Increasingly, the question is not just what programs employers offer, but whether employees can use them in ways that improve both financial wellbeing and day-to-day performance.

1. The gap between design and utilization

Total rewards strategies are usually well thought through. Organizations invest in market alignment, business priorities, and a strong mix of short- and long-term value. On paper, the programs work. Where things fall down is benefits utilization.

There’s often an assumption that if a benefit exists, employees will engage with it. In reality, engagement is uneven. People don’t always contribute enough to retirement plans, equity is misunderstood, and savings programs go underused. When faced with too many options, complex rules, and unclear trade-offs, decisions become harder. So employees delay, default, or choose the simplest path.

Check the data for clues on how to help. Are you seeing higher hardship withdrawals from your 401k plan? If so, what’s driving that and can we help people make better decisions? How is your retirement savings rate changing? Have people’s health plan usage habits changed? Reading the clues in other areas of benefits can help better direct your financial literacy tactics.

A quick tip: Don’t measure success by what you offer; measure it by what employees are confident enough to use. If engagement is low, assume it’s a design or communication problem before it’s a motivation problem.

2. Why employees struggle to decide

Making benefits simple is hard. There are regulations, tax rules, and the need to support a diverse workforce. Over time, programs are added and adjusted, and what once made sense becomes harder to navigate. Employees are then asked to make decisions quickly, often with limited context. They need to understand how options connect, what trade-offs exist, and what works for their situation. Even confident employees can find this challenging. So people default, delay, or choose the simplest option, which isn’t always the best one.

The goal isn’t to remove complexity, but to make it easier to navigate.

A quick tip: Focus on making choices easier to navigate, not narrowing them down. Help employees understand what works best for their situation, rather than expecting them to decode complex options on their own.

3. Recognizing different starting points

Employees approach financial decisions with different levels of confidence, experience, and competing priorities. A single, uniform approach rarely works, but segmenting by age alone doesn’t capture the full picture.

A more effective approach is to use personas. Define five or six profiles that reflect real employee situations, combining factors like career stage, financial confidence, family responsibilities, and priorities. These don’t need to be complex, just relatable enough that employees can see themselves in them. For example, you might observe that your employees’ financial wellness needs lie in the areas such as: 

• emergency savings and debt,

• balancing caregiving and longer-term planning,

• nearing retirement and thinking about decumulation or risk.

Once in place, personas can shape how you communicate benefits. Instead of explaining options in the abstract, you can show how they apply to each scenario. This makes decisions feel more practical and easier to act on.

Quick tip: Build a small set of personas that reflect real employee situations, and use them to make your communication more relevant and easier to navigate. And check our article on leveraging personas to align people programs with employee needs and boost engagement. 

4. Turning information into action

When it comes to benefit communications, instead of repeating what benefits are, it’s important to focus on helping employees move forward with a decision.

This means putting less emphasis on describing options and more on guiding next steps. What should someone consider before increasing contributions? What might make it worth joining an equity plan now versus later?

Timing is key. Well-timed, decision-focused nudges are far more effective than broad campaigns. Spread communication over time and align it to key moments when choices are being made.

Quick tip: Sharing your own employees' experiences can be one of the most powerful ways to turn information into action.  Seeing how your colleagues take action is often more powerful than any communication media.

5. Making financial literacy for employees practical

Financial literacy is often treated as education, with workshops, resources, and awareness campaigns. While useful, this doesn’t always lead to better decisions at work. A more effective approach is to focus on decision-making where the goal is to help employees make confident choices about what’s in front of them. That means focusing on specific decisions: how much to contribute to a 401k plan, what to do with vested equity grants, and how to balance short-term needs with long-term goals.

To be effective, guidance needs to be practical and directly linked to changing needs and decisions, not broad education that feels removed from real life. When financial literacy is framed this way, it becomes far more relevant and far more likely to influence behaviour.

Quick tip: Shift from broad education to targeted guidance. Don’t stop at explaining the benefits. Show employees how to apply them to real-life scenarios, and deliver that guidance at the moment decisions are being made, not all at once.

6. Using AI to make guidance more accessible

AI is becoming a practical way to help employees navigate benefits.

Instead of searching through documents or waiting for support, employees can ask questions in plain language and get answers relevant to their situation. This is especially helpful when decisions depend on personal context, like how contributions affect take-home pay over time.

But AI is only as good as the structure behind it. Clear policies and well-designed programs still matter. Used well, AI doesn’t replace financial literacy, but, indeed, it can make it easier to access and act on.

Quick tip: Start with your foundations before layering in AI. Well-structured, up-to-date content is what makes AI guidance accurate, useful, and trusted by employees.

7. A shared responsibility for financial literacy for employees across the organization

Financial literacy is often positioned as an HR-led initiative, but its effectiveness depends on a broader set of contributors.

Managers, while not expected to provide financial advice, often serve as an initial point of contact for questions. Their ability to guide employees to the right resources can influence how comfortable employees feel engaging with the topic.

Benefit providers and external advisors also play an important role. Many organizations already have access to tools, modelling capabilities, and advisory services, but these are not always visible or fully integrated into the employee experience.

When these elements are aligned, employees are more likely to experience financial literacy as part of a coherent system rather than a series of disconnected initiatives.

Quick tip: Make it clear who does what. When managers, providers, and advisors each understand their role in supporting employees, the experience becomes more connected and far easier to navigate.

8. Rethinking how success is measured

Participation rates are often used to measure success, but they don’t tell the full story. High participation can simply reflect defaults rather than informed decisions. What matters more is whether employees understand their options and feel confident in their choices. You can see this in the questions employees ask, how their decisions evolve over time, and whether they use available tools and support.  And think back to an earlier point, look for clues in your data that will help show whether your programs are working or not.

These signals give a clearer view of whether your efforts are making a real difference.

Quick tip: Look beyond participation rates and more to outcomes. Pay attention to confidence signals — the questions employees ask, how they adjust decisions over time, and whether they actively use available tools.

Conclusion

Financial wellness is often treated as part of the benefits package. Increasingly, it should be viewed as a broader workforce issue. In a world of rising financial strain, caregiving pressures, and longer working lives, employees’ financial wellbeing can affect focus, resilience, productivity, and even retention. Helping employees make better financial decisions will help aid benefit utilization, and, most importantly, support a healthier, more stable workforce.

Improving financial literacy, in this context, is not about adding more programs but making existing offerings easier to understand, more relevant to individual circumstances, and more actionable at the point of decision.

If you’re looking to make your total rewards offering easier to navigate and more effective in practice, we are happy to help. Get in touch with us!