There are steps employers can take to help alleviate a root cause of employee stress: worries about money. Companies providing financial education in the workplace also reap the benefits of increased employee productivity, retention and loyalty.
With employees across the nation still feeling the aftershocks from the financial crisis, HR and benefits managers are working hard to ease the effects in the workplace. For many employers, financial education programs present a low- or no-cost opportunity to provide some much-needed guidance. Training programs that focus on work-oriented skills and knowledge are common across a variety of professions, and sessions that speak to issues in their personal financial lives are appreciated by employees. Companies providing financial education in the workplace also reap the benefits of increased employee productivity, retention and loyalty.Why Implement Personal Finance Education?
The Employee Benefit Research Institute found that the percentage of workers who were confident or very confident about having enough money for a comfortable retirement dropped 10 points, from 64 percent in 2008 to 54 percent in 2009. Even before the economic meltdown, a marked shift away from the traditional pension model to defined contribution plans was in full swing. Employees are increasingly responsible for their own financial futures, but financial literacy evaluations indicate that many Americans don’t have the tools and education they need to manage their money long term.
According to a 2009 report by Jumpstart Coalition for Personal Financial Literacy, fewer than half of high-school seniors qualify as financially literate. It doesn’t seem to get much better with age: A national poll by the MetLife Mature Market Institute in 2008 found that 7 in 10 people overestimated how much they could prudently draw down from retirement savings, with 43 percent believing they could safely withdraw 10 percent or more each year. Most retirement experts suggest a withdrawal rate of approximately 4 percent to avoid running out of money. Challenges in managing personal finances can have consequences for both the individual employee and the workplace as a whole. What’s in it for the Employer?
In September 2008, as the financial crisis worsened, half of the respondents to a survey conducted by Workplace Options said that stress from financial concerns was making it difficult for them to perform well at work. With the economy recovering but unemployment still high, many employees continue to feel pressure. Reducing employee stress is recognized as a key component of maintaining a productive workforce, and many companies address this issue through wellness programs. Financial education initiatives can further this objective by getting at a root cause of employee stress: worries about money.