Groundwork for Financial Capability

Laying the Groundwork for Financial Capability

The Consumer Financial Protection Bureau (CFPB) recently released a comprehensive report outlining a new teaching framework for educators and organizations to utilize as they create programs around building up youth financial capability. Many of the recommendations included in the report are considered education best practice and have long been a part of EverFi’s curriculum development model. Statistics from a recent EverFi study reveal that 9 out of 10 parents talk to their kids about personal finances, but only 43% of those parents feel prepared to do so, and that 66% of millennials cannot answer basic financial wellness questions. As such, the CFPB’s recommendations represent a monumental opportunity to impact change.

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At EverFi, we have always operated from the belief that our goal is to shape financial habits and norms while also building financial knowledge and decision-making skills. Together these goals have been two of the most important and longstanding levers used to influence financial capability. Our elementary, middle, and high school courses use many of CFPB’s recommended teaching techniques to introduce and reinforce these important concepts. From simulation to personalized learning and gamification, our courses strive to engage and empower students to become financially capable adults.

While the CFPB also stresses executive function as an important building block to help youth achieve financial capability, we have learned at EverFi that this is not often something that can be influenced by supplemental programming. It’s true that executive functioning is a prerequisite to success in financial well-being, as it is in every domain of life; however, it is best developed through supportive and nurturing environments and positive socialization. To truly build executive function requires year-round programming that is integrated into multiple areas of the curriculum and a child’s home environment.130603_cfpb_mahaskey_605

The CFPB’s report also highlights the central role that parents and caregivers play in developing youth financial knowledge, attitudes, and decision-making abilities. Through both direct instruction and modeling healthy financial behavior, parents and caregivers can help children develop responsible habits when it comes to spending and saving.

EverFi is committed to providing adult learners with foundational financial knowledge. Our adult course is built on the same core pedagogical foundation as our K-12 offering, but has been adapted to the more complex needs of an adult learner.  It provides adult learners with personalized and interactive learning to drive behavior change. Strengthening the financial knowledge of adults in turn creates home and community environments that help students build healthy financial attitudes, beliefs, and behaviors. This report validates EverFi’s future plan to develop a program specifically designed to help parents or caregivers speak with their children about finances, thus improving the executive function deemed important for youth financial capability.

Now is a pivotal time for financial institutions, government organizations, and technology companies to partner and empower teachers, parents and caregivers with the knowledge they need to develop students of all ages into financially responsible adults. We at EverFi are thrilled to share the CFPB’s commitment to this goal and look forward to our continued partnering with organizations to help achieve its recommendations.

Zach Wagner, Vice President, K-12 Content and Product Development
Julia McCombs, Vice President, Adult Content and Product Development

This is How Workplace Diversity Improves Company Culture

To put it bluntly: workplace diversity is a crucial component to a successful business. This piece will explore the benefits of workplace diversity and how it can help improve a company’s culture.

The “What”: Four Layers of Workplace Diversity

Diversity and inclusion are pivotal economic and business imperatives, yet that understanding alone is not enough to implement them in the workplace. Dr. Edward E. Hubbard, author of Measuring Diversity Results and How to Calculate Diversity Return on Investment, believes that there are four layers of diversity:

(*)   Workforce diversity – Group and situational identities (race, gender, ethnicity)

(*)   Behavioral diversity – Work, thinking, and learning styles (including beliefs and values)

(*)   Structural diversity – Combining different cultures, communities, and hierarchies

(*)   Business diversity Markets, processes, creativity, and project management styles

The “Why”: Create Healthy, Compliant, and Inclusive Workplaces

We live in a diverse world, but that is not always reflected in our workplaces. To be diverse is to be inclusive, and to be inclusive is to create a healthy, compliant, and accepting environment for employees. Incidentally, research gathered for a Deloitte University Press report on diversity and inclusivity reveals that companies are beginning to shift their focus from diversity as a compliance obligation to treating diversity and inclusion as a business strategy. However, nearly one-third of companies surveyed globally claimed to be unprepared in that area.

Promoting diversity in the workplace is not the same as successfully executing it and all of the benefits it can offer. Consider diversity in the workplace the way you would workplace safety—fundamental to the betterment of a company and its employees.

At face value, diversity is an attractive feature for a workplace to have when scouting new talent and maintaining a reputation in the workforce. However, diversity goes beyond what employees and clients can see—it must be experienced and felt. Perhaps this is why only one in five companies that were surveyed for the Deloitte University report believe their company is fully “ready” to address the issue of workplace diversity. If most companies are still treating workplace diversity as a compliance obligation, it’s no wonder only 20% are ready.

Here are some diversity benefits 80% of companies surveyed may be missing out on:

(*)   Connecting with customers

(*)   Employee motivation

(*)   Employee recruitment and retention

(*)   Continuous quality improvement

(*)   Driving performance and innovation

(*)   Acquiring talent

A diverse workplace is profitable. In an article published on the American Bar Association website, statistics showed that business that deter women and minorities from exhibiting their full potential “not only expose themselves to liability, they prevent themselves from potentially multiplying their customer base and earning greatly increased profits.”

According to research cited by Cedric Herring in a 2009 article published in the American Sociological Review, the most racially diverse companies bring in nearly 15 times more revenue than the least racially diverse. Additionally, Herring found racial diversity to be a better determinant of sales revenue and the amount of customers than company size, age, or number of employees.

The findings for the advantages of women in the workplace are equally impressive. According to a 2011 research report conducted by Nancy M. Carter and Harvey M. Wagner, companies that have three or more women on the board “outperform companies with all-male boards by 60 percent in return on invested capital, 84 percent in return on sales, and 60 percent in return on equity. These numbers suggest that diversity and inclusion are not just profitable; they have a synergistic impact on profits.”

According to Hubbard, the presence of diversity impacts individuals, teams, organizations, customer markets, and communities at large. Consequently, the presence and promotion of diversity does not automatically eliminate the existence of harassment and discrimination in the workplace–but it can over time, if properly implemented and executed. As stated in a workplace diversity study published on the University of Florida website, “Managing diversity is more than simply acknowledging differences in people. It involves recognizing the value of differences, combating discrimination, and promoting inclusiveness.”

In and out of the workplace, harassment and discrimination are abundant. It’s not illegal outside of the workplace to lead with one’s prejudices and biases, but inside the workplace, those attitudes can be challenged with policies, the Employee Handbook, and Code of Conduct. Measures can be taken in the workplace to ensure harassment and discrimination are met with consequences, and the presence and implementation of creating diversity among personnel can help to eliminate those behaviors.

For example, earlier this year an employee who identifies as a woman was discriminated against when her employer told her that she must “dress in ways that express [her] biological sex,” which is male. The employee refused to follow her company’s restrictive dress code and was ultimately terminated for violating it. Because of this discrimination, the employee was on the receiving end of her employer’s bias and was unable to reach her full potential while working for the company. Had diversity been enforced by the employer, the employee may have felt more accepted and motivated.

The “How”: Transition From Workplace Diversity as a Compliance Obligation

Deloitte University published an article discussing their report. In it, they explore what they believe to be the two major themes that can help companies transition from diversity as a compliance obligation to “building an inclusive workplace that inspires employees to perform at their highest level.” These themes are making diversity of thinking a business imperative and focusing on inclusion as well as on diversity itself. 

Forbes magazine suggests the following be done in order to achieve a diverse workplace:

(*)   Remove unconscious bias  Tinna C. Neilsen, founder of Move the Elephant for Inclusiveness, said that “The core of inclusion is all about leveraging diversity of thought… a tough thing for a lot of people because sometimes they don’t know enough about group dynamics like group conformity…. You can have as much diversity and as many different kinds of people in a team, but if you allow group conformity to dominate, then you’re not going to leverage any of it anyway.”

(*)   Make change happen  Identify what needs to change, figure out how to change it, and make the change.

(*)   Replace antiquated practices  Dr. Patti Fletcher, Strategic and Solution Marketing at SAP SuccessFactors, states that “The processes, practices and architecture we have in place right now are antiquated. Nothing is going to change unless those things change . . . People don’t change because you tell them to. They change when you enable them to . . . we need to use choice architecture, meaning putting tools in front of somebody to enable them to do something totally different without them even realizing it. For example, blinding a resume where you don’t see a name or an address, and therefore not having that unconscious bias be able to kick in.”

By broadening the scope of workplace diversity from race, age, gender, and physical ability to also include diversity of thinking, companies can better understand their employees and discover additional ways to solve problems. Employees want not only to be heard, but truly listened to. In order to achieve that, a company must listen to every voice, to everyone who chooses to participate.

LawRoom offers online compliance training in managing bias, which aims to educate users about unconscious preferences and generalizations that often arise in the workplace. These biases may result in unfairly limiting career opportunities for existing and potential employees. We also offer training in anti-discrimination, harassment, and ethics–all of which promote prosocial behaviors that comply with the law and can help to make the workplace a better place. Please visit Lawroom.com for more information.