As a business owner you probably devote a lot of time and resources into the well-being of your employees, whether that's in the form of employee benefits like health insurance and retirement plans, or other programs that are focused on personal and professional development or mental health. However, more and more employers are investing in a new type of benefit for their workers.
Financial education programs.
Resources that help employees learn the basics about investing and money management have been shown to have benefits across the board. Harvard Business Review reported that “employers are quickly embracing models that allow for greater... personal-finance assistance. The evolution is not just good for the workers — empowering a more financially confident workforce will drive greater overall business outcomes.”
This idea was echoed by the Society of Human Resource Management (SHRM). Various studies have shown that "higher absenteeism and lower engagement are found among workers with money angst." Overall this means that employees who have less financial education well also be less productive in the workplace.
While many employees find that benefits such as health insurance and retirement plans are a crucial part to workplace satisfaction, most would like resources that help them understand what they're signing up for.
The Colorado Secure Savings Plan Board did a research study with the Corona Institute on the factors that affect Coloradans’ retirement savings. They found that employers are commonly used source for information and it was reported that "over 40% of Coloradans... indicated an interest in investment optimization training, financial planning, personalized planning, and training on types of investments through their employer."
Lack of basic financial education, especially around topics involving investing, can cause employees to feel less confident about enrolling. Employees want to know that they're getting the full value from their benefits.
Employee financial education also benefits you, the business owner because the more employees understand the concepts around a 401k retirement plan, the more likely they are to participate. Higher participation rates could lead to more tax benefits and lower turnover. There is also an administrative cost to providing benefits to employees, so it’s important maximize their usage.
Financial education programs can come in many forms such as business after hours, lunch and learns, or individual consulting sessions. Often times it is more convenient to have (for time and professional liability) a financial professional come in to work with employees on an ongoing basis.
While these programs can be independent of the other benefits you provide, it may also help to integrate your employee benefits into the financial lessons to maximize their usage and value.
Overall, providing financial education as a workplace benefit is not only good for employees, but for the business as well. Decreasing the stress around personal finances will lead to better engagement and productivity. Happy employees will be less likely to leave (decreasing costs associated with turnover and training) and will contribute to a better workplace culture. Ultimately, a happy and productive team will bring you that much closer to reaching your business goals.
Wondering what a financial education program might look like for your business?
Contact us to learn more!