Knowledge and Insights
Most people understand that there are only so many hours in the week but are surprised that surveys show 20 hours of productivity are lost per month for financially stressed employees. When the surveys were first done in 1979, 10% of employees reported decreased productivity because of financial stress. Now, that number exceeds 25%.
A recent study by the International Foundation of Employee Benefit Plans shows some staggering figures. In workplaces that offer financial education:
- The likelihood that overall stress levels are somewhat or very high is reduced by 9%.
- The feeling that average employees are ready to retire when they reach normal retirement age jumps 18%.
The survey included 397 organizations with 270 offering some kind of financial education. Of the organizations offering financial education, 66% said their programs are somewhat or very successful, with success greatly increasing when particular actions are taken:
- Invitations are extended to employees’ spouses.
- Most-needed topics are assessed.
- Education is extended to retired employees.
- Programs are customized for specific age groups or life events.
With 88% of the workforce having had no education in managing their money, it’s no wonder employer-sponsored financial education is fast becoming a best practice among industry leaders who want a productive and profitable workforce. For some organizations, decisions about financial education are made based on the bottom line, but, for many, it’s done because it’s the right thing to do. Forty-five percent of employers surveyed believe it is the organization’s responsibility to educate staff on pension and benefit options, encourage retirement savings, and improve participant money management.
Employers with successful programs have also found financial education doesn’t need to be incredibly time-intensive or sophisticated in order to be effective. Of the respondents that said they’ve seen positive results from their financial education programs, 84% offered those programs during normal work hours. Education is offered in many ways: voluntary in-person classes, newsletters, emails, workbooks, online resources and courses, retirement income calculators, and free personal consultations.
On the whole, employers want employees to feel secure because secure employees are the most productive. Financial education, having gotten a boost from some notable large employers, should be accessible to everyone and is becoming more and more popular with larger employers but hasn’t yet trickled down to smaller ones. Many steps have been taken to improve the lives of employees over the last hundred years; financial education is the next big step toward the future.
In the coming months, The Mercadien Foundation will be launching a program for employers and in the community based on employee personal financial education.
To stay in the know about this and other Mercadien Foundation programs, visit us here.