Financial Education Empowers Employees
to be More Productive
Key Question Topics:
Companies providing financial education show Improvement in workplace including increased productivity, employee morale, and company loyalty and decreased healthcare costs, absenteeism, turnover, workplace distractions, and operational risk across the company. Financial education programs have the effect of contributing to the company’s bottom line between $3 and $4 for every dollar spent.
What Will a Quality Financial Literacy Program Accomplish for Employees?
A quality financial literacy program should help your employees practice good financial behaviors. Over time these behaviors will result in positive changes in their financial lives. The changes include increased assets, decreased liabilities, increased net worth, reduced financial distress, and improved financial and overall wellbeing. As a result they will be better able to reach their financial goals including a successful retirement. A quality workplace financial program should provide employees access to help with their overall financial fitness at every stage of their careers. This helps employees live better financial lives as well as maximize savings for retirement. People can get ahead financially only by sacrificing some current spending to save and invest and by practicing good financial behaviors.
What are the Top Ten Financial Behaviors?
There are many good personal financial behaviors but the most fundamental truth is that one must spend less than one earns, thus sacrificing some spending to invest for one’s future. Additional good financial behaviors include:
How Can Employers Help Employees Improve Their Personal Financial Behaviors?
Many employees realize that they have some financial behaviors that need changing. To succeed they must believe that they can successfully change those behaviors, and they must have a plan to change. Employers can help by giving employees easy access to quality financial programs. Such programs go well beyond simply explaining an employee benefits package and address the key decisions that must be made and how to integrate employee benefits into the broader pattern of good financial behaviors.
Where Should An Employee Financial Education Program Begin?
Financial programs should be based on the level of employee financial distress. The suggested topics for a quality financial program are listed below. The topics should differ based on employees’ reported level of financial distress.
High financial distress/Poor financial wellness
Average financial wellness/average financial distress
High financial wellness/low financial distress
Should Financial Education Be An Employee Benefit?
The employer's benefits package is at the very core of financial success for an employed person. Those who make wise choices among benefit options save money, reduce income taxes, and increase retirement savings while securing benefits that genuinely fit their needs. Such decisions lead to better personal money management behaviors that maximize the likelihood of financial success throughout their lives.
However, financial stress and the lack of basic financial literacy are the major reasons why employees do not make wise choices among benefits options. Research shows that 30 million American workers – 1 in 4 – report they are seriously distressed and dissatisfied with their financial matters … and this spans across all income levels. Financially unwell employees do not make the best decisions for themselves regarding retirement planning, pre-tax health and dependent care and other employee benefits.
What Financial Education Resources are Available to our Business or Organization?
Check out “Resources” on these websites: