×
First-time login tip: If you're a REBA Member, you'll need to reset your password the first time you login.
17 Jan 2019

Why emotional intelligence is important for helping an employee improve their finances

Emotional intelligence is about being able to recognise, understand and respond effectively to other people’s emotions. When it comes to improving the financial well-being of employees, it’s essential to take an empathetic and emotionally intelligent approach to help them make real improvements to their financial future.

8915-1547468106_EmotionalintelligencehelpingfinancialwellbeingMAIN.jpg

Here are the three main reasons why emotional intelligence is so important for helping employees improve their financial wellbeing.

1. Emotional intelligence helps you understand your employees’ goals and motivations

When creating your financial wellbeing strategy it’s essential to make sure you really understand how your employees feel about money, what their biggest concerns are and what they hope to achieve in the future. Otherwise how will you know you’re solving the right problems?

Unfortunately when it comes to money, it’s often not as simple as just asking employees what they hope to achieve and acting on the results. For instance if someone said they wanted to buy a house, that may be because buying a house is their most important goal. But it could also be that they are saying that because they think that’s the best way to achieve some other, deeper goal e.g perhaps they think buying a house is the best way to grow their wealth, or they feel like that is simply what you are ‘supposed to do’.

I recently came across this exact scenario with a client who initially said she wanted to buy a house. After some discussion, we later found that what she really dreamt of doing was being able to afford to take a 6 month sabbatical so she could travel before settling down. She had been hesitant to mention this at the beginning because she dismissed it as an irresponsible thing to do with her money.

In fact, it turned out that travelling was a perfectly achievable goal for her, without giving up being able to buy a house a bit further down the line. By taking an emotionally intelligent approach and seeking to understand her deeper motivations and goals we helped her achieve what she really wanted, instead of spending all of her life savings on a house she wasn’t really ready to buy.

When creating a financial wellbeing strategy for your employees, it’s essential to take an emotionally intelligent approach from the very beginning. Sit down with a few of your team and try to listen to what their real feelings and concerns about their finances are.

2. Emotional intelligence helps you to communicate effectively

One of the biggest challenges with talking about financial wellbeing in the workplace is to avoid making it too complex and ensuring your team don’t dismiss it as a topic that simply doesn’t interest them. If you want your financial wellbeing benefits to have an impact, it’s important to communicate them in a way that resonates with your team.

Emotional intelligence helps you to think about which communication styles you should be using, and how to frame the message in a way that will most engage the team.

When I talk to clients for the first time, I’ll try to change my style to suit the person I’m talking to. For instance, some people are confident about money and like to be challenged or have their thinking questioned. Others are more nervous about talking to someone about their money and so I’ll need to be more gentle and encouraging.

Even if you’re not talking to individual employees about their finances, the emails you send, posters you put up or seminars you run will all have a certain style and message. You should make sure that your financial wellbeing benefits are communicated in ways that will connect with more than just one group of people in your organisation.

3. Emotional intelligence helps you to build trust (and encourages action)

Finally, and perhaps most importantly, being emotionally intelligent will help you build trust with your employees, which is the best way to inspire action. The most frustrating thing is to spend lots of time setting up a financial wellbeing benefit only to find that no one is taking action.

For most people, managing their money well is one of the most important things they have to do, but it’s notoriously difficult to find trustworthy sources of guidance or advice. As an employer, you’re in a great position to provide help, but if your team don’t trust that you have their best interests at heart, or feel like you don’t really understand their challenges, then they won’t be encouraged to follow through.

When I talk to clients, it’s far more important for me to listen empathetically, and demonstrate that I understand their financial worries than to provide a load of financial information. The former reassures the client that I have their best interests in mind and builds trust that my recommendations are good ones. The latter is likely to overwhelm or simply make them feel ignored.

As you’re building your financial wellbeing strategy, make sure to be emotionally intelligent and responsive to your employees fears or concerns. It will help you build trust with your team and ensure they actually take action to improve their finances as a result.

The author is Caspian Paget, Financial Coach at Hatch. 

This article was provided by Hatch. 

Related topics