Reasons to Provide Employee Financial Education

As thriving in the current economy becomes more and more difficult, just as many more individuals are suffering from heavy stress related to their personal finances. And money problems don’t stay at home – people carry these burdens into the workplace too. It’s no wonder so many organizations and corporations are beginning to look into offering employee financial education to help relieve this stress.

In general terms, financial health can be measured across three key indicators: whether a person can successfully manage their finances day-to-day, whether they could handle an unplanned emergency expense, and whether they are able to save money for the future. There are many pathways toward reaching these capabilities, but a successful financial wellness program will address all three.

Why Employee Financial Education is So Sorely Needed

Money worries are a top cause of employee stress, which results in negative health effects – both mental and physical. Less healthy employees are less productive, feel less engaged, miss work more often, and are more distracted in the workplace. When called upon to make financial decisions related to their employment – such as determining their retirement contribution or choosing a health care plan – they lack basic knowledge to guide those decisions.

From the employer’s standpoint, when employees experience financial stress, the company suffers alongside them. Productivity and performance go down, while absenteeism and employee turnover go up. Stressed employees are sicker employees, which means the company pays more for healthcare coverage plans and missed work time. The need for employee financial education programs becomes increasingly more obvious.

Formation of Employee Financial Education Additions

How Employee Financial Education Benefits Workers, Employers

When an employer commits to providing employee financial education, the benefits can be amazing. For employees it means reduced stress, which improves their physical/mental health, engagement and satisfaction with work, loyalty to the company, and productivity. They feel in control of their lives and have more flexibility to make personal choices. Financially healthy workers also make better choices about their retirement and healthcare options.

From the company point of view, the same results also have benefit – improving employee financial wellness at work leads to more productive, satisfied, engaged, and loyal employees. Companies that provide employee financial education are perceived as having genuine concern about their workers’ best interests. Those employers foster happier, more collaborative company cultures and attract employees who are more likely to stay for the long-term. And programs can be presented at a relatively low cost that delivers a strong ROI.

Employee Financial Education Programs: Effective Methods

Options for offering employee financial education come in many shapes and sizes, so it’s important to evaluate the quality and fit of the program you choose. Accurate data should drive the decision: using surveys, pilot initiatives, and/or interviews, collect information from employees as to where they currently stand in terms of money management knowledge. Some companies might want to try out a few programs to evaluate which deliver the best results.

Research has shown that there are multiple pathways to financial well-being. Yet some common components have shown promising results in a wide range of workplaces. These features include support from peers, digital delivery and gamification options, top-quality resources, lessons that are practically applicable, and ongoing education after the programming concludes.

Employee Financial Education Programming Support Your Teams Financial Wellness

An employee financial education program offers benefits for both employees and the company. Financial issues are at the root of many problems people face today. Providing employees with financial education is an essential piece of any wellness program.

The National Financial Educators Council provides a solution for your employee financial education initiative.  Research has shown that improving employees’ personal finances can increase productivity, lower stress, and create a positive working environment. Such a program also helps those employers that offer retirement benefits comply with DoL guidelines.

The NFEC has Solutions for Those Seeking:

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Full-Service Employee Wellness

Complete employee financial education solutions—live events, virtual learning, comprehensive reporting, and top educators.

DoL / ERISA Workshop

For organizations that offer retirement plans, this 4-hour workshop covers DoL & ERISA guidelines as related to personal finance. Receive 4 hours credits from the HR Certification Institute.

Turnkey Employee Programs

Host your own employee workplace program. Provides HR (or training staff) and third-party trainers with materials needed to host a successful workplace financial education initiative.

For more information about starting an employee financial education program, review research from the Consumer Financial Protection Bureau

This white paper summarizes the existing research literature from George Warren Brown School of Social Work.