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  • Katie Lopes

Financial Literacy in HR (required)


The Seat

At the start of every work week I highlight the important meetings in the upcoming days. Last Monday, there was a two-hour window blocked in the afternoon to join the company's 401k committee where we would discuss the Plan's performance and review any potential changes for the upcoming year. As I jotted down notes throughout the meeting I took a moment to reflect on the diversity of the group. There were nine members, fairly balanced between men and women, various levels of education, primarily made up of members of management. I was the only Latina and Spanish speaker in the group.


I first joined this committee under the guidance of my DHR. It was her suggestion to get involved to understand the structure of a retirement plan and how to enhance it as a potential fiduciary for the Plan. As an HR member in that committee, you advocate on behalf of all employees in entry level roles to executive tiers. Any changes that may be considered for the plan are viewed from the aspect of how it impacts employees decisions to participate in the plan. Having a diverse 401k committee acknowledges the different perspectives others bring to the table. Although I may not be an expert in mutual funds, my grip on employee experiences is valuable. In order to participate in such conversations, one needs to have a basic understanding of the stock market to understand the impact certain decisions can have on employee experiences.


Once the meeting came to an end, I reflected on the content we reviewed. I was proud that my knowledge of investment options continued to grow, considering that financial literacy was not a strong focus for me just three years prior. There is a lack of financial literacy awareness in Latinx communities, which places aspiring HR leaders at a disadvantage if they're looking to step into a strategic role.

The Facts

Strategic planning in HR can mean different things depending on the size of an organization. In a department of one you are more likely to be involved in various conversations to create action plans to invest in employee experiences. In larger organizations, those strategy conversations are more commonly held in higher HR leadership roles. For aspiring Latinx HR leaders who aim for those opportunities, it is vital to have a strong foundation of financial literacy to effectively strategize in financial discussions that impact the department.


According to the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) report of 2017,

"Personal finance knowledge among Hispanics is lower than that of the U.S. adult population as a whole. But beyond the gap with the general population, there is a notable difference in financial literacy within the Hispanic population between those born in the U.S. and those foreign born."

Understanding this gap helps us recognize why working Latinx folks may be weary of "investing" in employee benefits, such as retirement plans.


Organizations invest in a range of benefits for employees wellbeing from health insurance to retirement planning. Advocating for retirement planning is a big need within the Latinx community. CNBC published an article July 2019 to address the retirement crisis in the Latino community. "According to a 2018 report by UnidosUS, only 31% of Latino workers participate in an employer-sponsored retirement plan, compared to 48% of all other workers ages 21 to 64." Although some organization may readily accept that all benefits offered are not for all employees, it discredits the point that lack of understanding a topic is what causes skepticism in such benefits offered. Ethnographic research can help organizations acknowledge the explanations for certain outcomes and can make recommendations on how to improve a situation. Providing resources to address financial literacy is one effort HR leaders are taking to help employees understand the value of financial literacy skills, which may help employees see the value of the benefits the company offers.

The Action Plan

There is a disparity between resources and building financial well-being amongst Latinx populations. We as Latinx HR leaders need to have a core understanding of the layers of financial literacy if we plan to join managerial tiers within an organization. Why? Because if you can represent the diversity of a group population in a subject that is unfamiliar to them, your suggestions hold that much more value to them when the time arrives for you to lead efforts to increase participation in certain programs. Financial literacy has helped me understand HR related finances in depth, such as Cafeteria Plans, payroll deductions, retirement plans and investment diversification. Without investing time to broaden my financial literacy skills, I would struggle to comprehend the impact of certain programs.


Despite having previously worked in a financial institution, it took years into adulthood to accept my lack of financial literacy was hindering me from joining business conversations. Growing up in a working class family, financial literacy was not something taught in my school curriculums nor was it mentioned in family discussions. If it wasn't for my partner who insisted on having conversations about building financial wealth, I may have never developed an interest in the topic. Along my financial literacy journey I have crossed paths with folks passionate about the essentials of budgeting, the stock market, and wealth tools within retirement planning. Below I share some of the free resources that I've found useful to build my toolkit, now it's time to build your own.


Podcasts - For those who prefer audio content, the following podcasts are in my rotation:

Instagram Accounts - if you don't have time to read a book, start following these handles on social media. Watch the algorithm influence the content recommended once you start following finance related tags:


Take advantage of these resources to build your skills and engage in discussions online. Challenge yourself to use this knowledge on a daily basis. Once you've immersed yourself in several financial topics, find opportunities to use these skills in your HR role. I guarantee it will make you feel empowered to understand more than the HR process at face value. You'll understand the foundation of many more department operations, which will make you a more strategic HR leader.


~Katie

The HR Anthropologist


#LatinainHR #Latina #HR #HRAnthropologist

#diversityinHR #diversityandinclusion #WOCleader


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