It’s a bit like saying cars run on gas, but we get it.
The International Foundation of Employee Benefit Plans finds that 96 percent of employers said employees’ personal financial issues had some sort of impact on their overall job performance.
The foundation’s report, titled A Closer Look: What’s Working in Workplace Financial Education, adds that offering financial education in the workplace “is an impactful way employers can counter the detrimental effects of financial distress.”
According to the survey, the most effective recipe for a successful financial education program (or wellness) is a mix of leadership support, patience and customization.
While half of employers with unsuccessful programs indicate a lack of leadership support as one of their biggest obstacles to offering financial education, only one-quarter of those with successful programs did so. Program longevity is also a major success factor.
“‘Good things come with time’ holds true for many things, including financial education programs,” Julie Stich, CEBS, associate VP of content at the International Foundation, said in a statement. “A program is likely to be more successful the longer it is in place and, according to the report, it takes more than five years to be reported as successful.”
For successful employers, 24 percent had programs in place for six to ten years and 49 percent for more than ten years, vs. 11 percent and 42 percent, respectively, for the unsuccessful group.
Customization is key for successful financial education programs. Employers with successful programs conduct an employee survey to assess both their financial well-being and which financial topics need to be covered. Nearly 30 percent of employers with successful programs have conducted an assessment. None of the employers with unsuccessful programs had.
Similarly, employers with successful programs customize education for specific groups based on age or income level. They also target education by life stage.
The survey indicated that the success group was more likely to offer education using a wide variety of formats, including free personal consultation services, classes and workshops, web-based online resources, workbooks and calculators.
What’s the payoff?
“Financial education programs lead to fewer employees reporting financial distress, calling in sick, being distracted and snapping at colleagues and customers. And that, ultimately, means a more productive work environment,” Stich concluded.
Among workplaces offering a financial education program, 61 percent reported having more financially savvy employees and 71 percent said employees are more prepared for retirement.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
