April is Financial Literacy Month. A just-released special report from Purchasing Power explores employees’ financial literacy status and how it is impacting employers as well as some of the solutions, including voluntary benefits.
The state of financial literacy among employees is frightening when you look at the statistics and what they are saying about how they handle their finances. What’s even scarier for employers is how much time employees are spending at work – on the clock – dealing with their financial situation. When they do, their productivity drops, and the employers’ bottom line is affected.
The statistics in the report – such as what percentage of employees don’t have a planned budget, don’t put anything to savings each month and have to use credit cards to pay some of their monthly household expenses – point to the state of financial literacy among employees. Other statistics in the report -- such as what percentage of full-time employees don’t have $2,000 in emergency savings, have trouble meeting monthly household expenses, have difficulty making minimum payments on time and haven’t been able to make major purchases – indicate why employees are financially stressed. That stress comes to work with them and affects your bottom line. This special report discusses benefit options that can help with employees’ financial well-being.
By offering financial wellness education and voluntary benefits that address financial wellness, employers can help their employees with short-term and long-term financial issues, as well as with changing the course of their financial behavior so they make better financial decisions going forward.
There is a wealth of options that employers in terms of financial tools and resources that assist employees in taking control of their financial well-being. Some online financial wellness resources are available as a value-add from other benefit providers. The financial wellness platform offered as a resource to Purchasing Power customers provides a holistic approach to financial wellness, comprised of a core financial education program; budgeting tools; free credit reports; and alternative credit reporting.
Among the voluntary benefit offerings are products that address employee’s financial wellness today rather than the future, as retirement planning does. These include financial counseling services and employee purchase programs.
Purchasing Power’s financial wellness platform is well-received by employees. Here’s some of the statistics about its usage:
- #1 and #2 reasons for registering are credit score improvement and debt reduction
- 70 percent say their expectations were met with the program
- 75% were completely or somewhat satisfied with the overall program (45% completely satisfied)
Read the full report, “Employees’ Financial Literacy Crisis: Why and How Employers Can Help.”