Several recent surveys have indicated a widespread lack of financial literacy among American workers. Add to this the fact that many employers struggle to engage workers in plan participation, and it becomes clear that workplace financial education could play a vital role in strengthening employer-sponsored retirement programs.
Financial Wellness by the Numbers
According to a 2015 LIMRA study, 95 percent of workers believe financial literacy is important. However, only 35 percent of respondents consider themselves moderately to extremely knowledgeable concerning financial products and services. The same study discovered that when given access to education concerning employee financial benefits, 72 percent of workers participate in those educational offerings. (Source: http://www.plansponsor.com/workers-value-overall-financial-education/)
A 2014 study by Four Seasons Financial Education (FSFE) noted that most employees list retirement followed by budgeting and debt as their greatest financial concerns. Only 27 percent of respondents reported personal finance education assistance as a part of their employee assistance program, and nearly a third of all employees receive no retirement plan education, which is surprising and somewhat concerning given federal compliance requirements. (Source: http://www.plansponsor.com/financial-wellness-wanted-and-its-in-short-supply/)
Financial Wellness Education Solutions
Financial wellness education in the workplace is a concept that some employers have begun implementing recently. As employers realize that financial stability plays an important role in workplace productivity, awareness of the need for basic money management education has also grown. In 2015, approximately 25 percent of employers reported providing some assistance to help employees budget their personal finances. This is done with the goal of helping workers learn how to achieve a level of personal financial health.
Financial stress has a negative impact on productivity, and financial difficulties also contribute to poor personal health—both physical and emotional. Employers who address these issues through financial education programs hope to decrease absenteeism related both directly and indirectly to financial stress.
Financial Wellness Made Accessible
Repetition and reinforcement are key to learning, and this is true for finance-related learning as well as other types of education. Unfortunately, a one-time seminar or onboarding meeting isn’t enough to help employees learn and put into practice good financial habits. Today, many employees use electronic devices for communication, and the use of social media, texting and email for financial education is one effective solution to rampant financial illiteracy plaguing our country’s workforce. Daily texts containing financial and budgetary tips provide a great resource for employee financial wellness. Weekly e-newsletters can also help.
Heartland Consulting Group works with employers of all sizes to find viable retirement plan solutions. If you’re interested in providing a more extensive financial wellness experience for your employees, contact your Heartland consultant to learn more. We’ll help connect you with resources that can help you educate your workers and improve financial literacy throughout your company.
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