Employee financial education is proven to boost the bottom line
Employees with poor personal finance habits can affect a company’s profitability. Money problems at home can lead to lower productivity at work, health problems and excessive turnover. A company that promotes financial literacy among its employees can add hundreds of thousands of dollars a year to its bottom line. The weak U.S. economy has taken a toll on employee benefits like health insurance and matching retirement plans. But a company can still provide a safety net for its employees with education in personal finance.
Financial security through employee education
To help its workers achieve financial security, as well as its bottom line, a company can do more than provide a paycheck. The Durango Herald reports that Employees with serious financial problems can waste as many as 20 work hours a month worrying about their finances. The newspaper cites a survey of American workers by creditcards.com that found 57 percent don’t budget and 40 percent spend 110 percent of their household income. The survey also found a correlation between consumer debt and relationship problems. Fighting about financial security was a major reason 50 percent of the workers in the survey were divorced.
Financial literacy and the bottom line
Promoting employee financial education is the mission of the Personal Finance Employee Education Foundation. The PFEEF claims that financial literacy programs contribute hundreds of thousands of dollars each year to a company’s bottom line. Results of employee financial education include improvement in productivity, morale and company loyalty. Higher financial literacy can also reduce absenteeism, turnover and workplace distractions as well as operational risk across a company. The PFEEF provides a return on investment model and an ROI calculator online that a company can use to estimate the benefits of employee financial education. It said employee financial literacy generally has a return ratio of three to one.
Employee financial education in action
Financial literacy is part of the corporate culture at Weyerhaeuser, a Washington state timber company. Business Week reports that Weyerhaeuser is recognized as one of America’s leaders in providing financial education to nearly 14,000 employees. The company has an established a benefits education department that offered more than 40 retirement, benefits and wellness programs to its workers last year. Employees who attended Weyerhaeuser’s financial literacy seminars said that they were better informed about their retirement programs, 99 percent thought that they could now make better retirement choices, and 88 percent said they would change some of their retirement choices. Participants in the program thought the seminars were a valuable employee benefit that enhanced their positive feelings about Weyerhaeuser