Think your employees’ personal finances are just that — personal? Think again. Financial stress can impact your workforce in negative ways, like reducing worker productivity and increasing absenteeism. In fact, financial angst is more common than you might realize. Studies have shown that a majority of workers are stressed about their overall finances, with many reporting that their financial problems are a distraction at work.
Therefore, improving financial literacy for employees can be a significant benefit for employees and employers alike. Workers who are better at managing their finances are less likely to end up with financial woes, request salary advances, or make hardship withdrawals from company 401(k)s. What’s more, implementing a financial wellness program can be a budget-friendly investment with easy setup and lasting value.
What do financial literacy programs look like?
Many large companies recognize the benefits of offering workers some financial education. For example, communications conglomerate, Cox Enterprises, provides employees with free access to one-on-one phone consultations with money coaches. These conversations cover topics such as debt counseling, retirement planning, budgeting, and student loans. Additionally, a “Know Your Numbers” initiative provides a personal retirement readiness statement to eligible Cox employees to help them stay on track with saving for a comfortable retirement.
These programs have had positive results and led to higher employee participation rates in retirement savings plans. “Management cares about these programs and helps drive them as educational tools for employees to understand and utilize their benefits,” says Cox former Senior Manager of Public Relations, Elizabeth Olmstead
Financial education doesn’t have to be expensive
The good news is that providing financial literacy for employees doesn’t require a ton of money or time. Even informal sessions can make an impact. Nest DC, a boutique property management company schedules a brown bag lunch-and-learn about personal finances for employees. The sessions had huge turnouts and ran much longer than expected, proving how eager employees were to learn about finances, according to Chief People Officer, Veronica Vivas.
Nest DC ended up buying access to an online finance program, and then offered employees a chance to win a $1,000 drawing in exchange for watching the program’s videos and completing short quizzes. “It was low cost – $10 per person per month, including the budgeting tool,” Vivas said.
This program encouraged more employees to sign up for the company’s retirement account, and helped boost employee morale and cross-team relationships. A group of employees were even inspired to save money by cooking lunch together in the company kitchen, instead of going out to lunch.
Tap into service provider expertise
Companies that supply benefits to your organization can be a great resource for financial wellness programs. MassMutual, for example, conducts free, on-site financial workshops called PlanSmart (a MetLife program) for its clients’ employees.
Each week the presenter talks about a financial topic and gives employees homework that helps them apply the lessons to their own financial situations. At the end of the program, employees have a greater understanding of where they stand with investments and how well they’re saving for retirement. Your benefits provider may offer similar programs.
It’s ok to start small
For smaller organizations, you may be able to hire a local Certified Financial Planner® to provide financial literacy for employees. For example, Aaron Kahn, an independent, fee-only CFP® with Wealth Management Strategies, Inc., conducts roundtable discussions with his clients’ employees, and provides them with unbiased financial advice.
The benefit of an independent financial advisor is that they may be less likely to try to sell you something. “Someone from an investment firm might tell the employees to put extra income into investments, while a life insurance company adviser would likely suggest buying a life policy,” he says. “A neutral adviser will discuss pros and cons of each option and how to calculate the best return.”
Pitch your financial wellness program to promising applicants
Whether you choose to use a knowledgeable financial adviser or a reputable program, offering financial literacy for employees has clear benefits for both organizations and workers alike. An added bonus is that you can pitch your company’s financial education program to promising new candidates during the hiring process. For help with this and other recruitment strategies, sign up for Monster Hiring Solutions and receive expert recruitment advice, the latest hiring trends, and even some great Monster deals.