Is financial education a benefit that employers should offer their employees?
Providing financial education is one way for employers to demonstrate commitment to and concern for their employees. It also supports the recruitment and retention of quality staff. A good first step for the employer is to understand how important the issue of money management is to employees. Of course, the responsibility for financial management lies ultimately with the employee, but its effects can carry over to become a company’s problem, as well.
Partnership with the employer makes it more likely that employees can learn what they need to and be reinforced for taking this part of life seriously. Industry estimates show that financial wellness initiatives can generate a return on investment of more than 3-to-1.
What would a financial wellness education consist of?
A financial wellness education should focus on three main goals. First, it would attempt to provide employees with a sound knowledge of the principles of money. Second, it would help give them the ability to make financial decisions based on facts and sound reasoning. Third, it would help give someone the ability to manage their financial life based on personal values and goals.
What can an employer do to help his or her employees in terms of financial management?
Financial education has been shown to inspire employees to take action and make positive changes in their behavior; for example, turning stress about the future into showing them how to save for retirement. Persons who have received financial education are less likely to take time off to handle personal financial emergencies and are less distracted by the stress that financial problems could bring. Financial distress can lead to insomnia, high blood pressure, migraines and other serious health concerns, according to PFEEF.
How widespread is the problem of financial distress in the workplace?
According to a survey by PFEEF, an estimated 30 million American workers — or, one in four — are subject to serious financial distress. In 2009, the Society for Human Resource Management reported that in the previous 12 months there had been a 26 percent increase in employees having their wages garnished by collection agencies and a 20 percent increase in requests for pay advances.
How can employers define which money problems employees need help managing?
Overindebtedness, overspending, unwise use of credit, bad spending decisions, poor money management, insufficient money to make ends meet, and concern about the money needed to retire head the list of problems employees face. In a recent survey of more than 45,000 American workers, 71 percent said they would find it difficult to meet their financial obligations if their paycheck were delayed by one week.
ROSE GANTNER, Ed.D., NCC, is the senior director of health promotion at UPMC Health Plan. Reach her at [email protected] or (412) 454-8571.
