April is National Financial Literacy Month and the numbers show that many employees are struggling financially, living paycheck-to-paycheck, and don’t have the financial knowledge or a method to improve the situation.
As employers are realizing the impact that financially-stressed employees who are distracted at work have on the company’s bottom line, they are taking a more active role in providing financial wellness education in the workplace.
The goal of financial wellness education programs is to change behavior to address short-term needs and plan for the future. To be successful, the programs that employers implement must be customizable for each employee’s situation.
To build a financial wellness education initiative into the employee benefits program, employers can construct it themselves, making various online tools and resources available to employees, or utilize non-profit organizations, consulting firms, or other company offerings to provide services which include online education and more. Voluntary benefits are available to help with financial wellness, such as financial counseling services that provide one-on-one counseling by a certified financial professional or group learning through seminars. Additionally, some employee purchase programs offered as a voluntary benefit include comprehensive financial wellness education services.
Whichever of these ways employers choose to approach financial wellness education for employees, the first step must always involve some sort of financial assessment for the individual employee which includes outlining their current financial situation, identifying areas for improvement and prioritizing action steps. Setting goals and implementing actions for their specific situation are the roadmap for success in changing their behaviors.
A December 2014 Harris Poll on behalf of Purchasing Power identified the type of financial wellness education that would help full-time employees, along with the percent of employees interested in that type of education:
- Saving for retirement – 37 percent;
- Paying off debt – 33 percent;
- Investment advice – 37 percent;
- Budgeting – 21 percent;
- Personal finance coaching – 14 percent;
- Saving for children’s education – 14 percent;
- Buying a home – 12 percent; and
- Understanding and building credit – 11 percent.
The same study showed that 40 percent of employees would take advantage of financial wellness education opportunities made available through their or their spouse’s employer.
By providing financial wellness education through in-house resources and considering non-traditional voluntary benefits that address the topic, employers not only will take a more active role in improving financial literacy, but will enhance their bottom line.
For more information on this topic, refer to our recent white paper, “Money Smarts: Helping Employees Make the Grade”.