Written by: Scott Hauptmann
It’s already difficult to reach employees and educate them on the need to save for retirement, and the task is made harder when some employees speak a different language or grew up in a different culture. While there’s not a one size fits all approach, it’s important to provide inclusive, multilingual financial and retirement education for your employees.
A more diverse workforce is leading to more workers whose native language is not English. But there’s a risk employees with a language or cultural barrier may be at a disadvantage when it comes to financial decisions.
For example, while you may think everyone knows what an interest rate is (the percentage charged by a lender on money borrowed), you may be surprised to learn interest is calculated differently across countries! If you don’t know what you don’t know about financial terminology, it can quickly become overwhelming.
That has implications for employers too. If employees become victims of financial stress because of poor financial education, it can result in lower productivity and higher turnover.
Employees with a language barrier may also be unlikely to be saving for their future in a retirement plan. With so many cultural and regional differences when it comes to saving and investing, having access to a trusted resource to speak about retirement in their native language is important.
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 workforce. In return, you may be rewarded with the loyalty of longer-tenured employees.
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 loyalty:
- 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 keywords and phrases make sense. Literal word-for-word translations often don’t exist or don’t accurately 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 who are heavily 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 these commitments of time and resources will have a long-term return in higher productivity, employee retention, and employee engagement. It’s about moving everyone, regardless of the language barrier, from surviving to thriving.
This content is for general information only and is not intended to provide investment, tax or legal advice or recommendations for any particular situation or type of retirement plan. Please consult with a financial, tax or legal advisor on your own particular circumstances.
Chief Operations Officer
Scott Hauptmann is the Chief Operations Officer (COO) for TCG Group Holdings, LLP. and is a Partner at TCG Group Holdings, LLP. Scott is responsible for the oversight and day-to-day operations of all retirement plans administered by TCG Administrators, and he works to maintain the relationships TCG Administrators has with its clients, participants, outside vendors, and financial representatives.
Scott graduated from the University of Texas with a BBA in Finance and a minor in Sociology. He’s an active member of the American Society of Pension Professionals & Actuaries (ASPPA) and the National Association of Government Defined Contribution Administrators (NAGDCA).
Financial assistance is available! Get matched with a Financial Advisor: