Offering and maintaining a financial education program can provide rewards for employees and employers, according to the recent survey A Closer Look: What’s Working in Workplace Financial Education 2016-2017 by the International Foundation of Employee Benefit Plans.
The study results indicate that financial education programs have a positive influence on employees, especially initiatives that have been in place for longer periods of time. In fact, the survey demonstrates that it could take up to five years for a program to be reported as successful. That requires a strong commitment from an organization to provide this type of education and remain patient to realize its impact.
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Nearly half of employers with successful programs agreed with a statement that they feel it is their responsibility to educate, improve financial literacy, encourage savings for retirement and provide money management strategies, compared to 38 percent of employers with unsuccessful programs. Successful program employers indicated it was important to have leadership support and a budget devoted to financial education.
Helping to create a financial savvy workforce stems from program offerings that include a variety of education topics discussed through different, often personalized strategies by various communication methods. Here are the most common topics, strategies and methods of successful programs:
- Investments 73%
- Savings 70%
- Insurance 47%
- Offered during regular work hours 79%
- For Spouses too 45%
- Customized for specific groups (i.e. age-based, income level or life stage) 33%
- Free personal consultation services
- Voluntary classes/workshops
- Web-based/online resources and courses
These best practices help employers increase their confidence levels of their workforce’s financial savviness and retirement readiness. Specifically, organizations with a program in place longer than two years feel only 37% of their participants are not very financially savvy compared to 62% of participants from organizations that do not offer financial education. Additionally, successful program employers believe only 29% of their participants are not ready for retirement at retirement age compared to 43% of participants who are not receiving financial education.
Like all employee benefits, surveying employees to assess their needs and then to measure their engagement or improvement is key to a successful offering. Helping employees grow in their financial well-being and literacy is a long-term commitment. Organizations that offer financial education programs for the long-haul are likely to see their investment pay off by having a less stressed employees with financially-stable futures.
Source: Benefits Magazine. A closer look at workplace financial education. May 2017. PP8-10.