More employees are trusting their employers for help with financial issues and financial education. And employers who can help employees reach their financial goals by providing education and assistance can benefit with more engaged, productive workforces.
For example, when employees are trying to pay down student loans, pay for a child’s education, save for retirement and meet other financial goals, they can become overwhelmed and frustrated. 67 percent of employees say they find it stressful dealing with their financial situation, and 35 percent say that issues with personal finances have been a distraction at work, according to a PwC survey. Those who are worried about finances may miss work more often or accomplish less while at work.
However, it doesn’t have to be that way. Employers can help employees by providing tools and resources to help, and by boosting their confidence about reaching their financial goals. The workplace can be a place where employees don’t just earn money, but they also learn how to use it wisely.
Employees want to learn about finances at work
Learning about finances may not seem like an exciting endeavor, but research shows that many employees actually want financial education. In 2018, about 25 percent of employers had a budget for financial education for employees, but another 20 percent were considering adding financial education to their budgets, according to a study from the International Foundation of Employee Benefit Plans (IFEBP). More than half of those who already provide financial education to employees planned to increase their offerings within the next two years.
To help empower employees to start improving their financial pictures, make financial education available as part of your regular training curriculum. Focus on providing programs that give employees the tools they need to make informed decisions and actions that can transform their financial lives. The most popular topics for financial training programs include budgeting, preretirement financial planning and retirement plan benefits, according to the IFEBP study.
In addition to offering online or live training programs, you can direct employees to free resources such as podcasts, blogs and other resources. Consider adding a financial information or info box to your employee newsletter or other communications, where you can recommend various resources or offer financial tips.
Also, consider offering financial assessments for employees on an annual basis. This could be a sit-down opportunity with a local financial planner or just completing a questionnaire and getting written feedback. The individual financial assessment shouldn’t be a pressured sales call; it should be an opportunity for employees to take stock of their current financial situation, set goals and check progress.
New tools and benefits can help
In addition to education, employers can provide a number of tools and benefits that can help employees reach their financial goals. For instance, student loan repayment plans and student loan refinancing can help employees pay off student loan debt. And employees with student loans say those loans represent heavy burdens for them: Of employees surveyed, 49 percent of millennials said they have student loans, and 80 percent say their student loans have a moderate or significant impact on their ability to meet their other financial goals, according to PwC. And millennials aren’t the only ones with student debt—26 percent of Xers and 10 percent of boomers also report grappling with student loans.
Many of the employees who aren’t stressed about their own student loans are stressed about financing their children’s college education. Employers who offer college assistance benefits can ease their minds.
In addition to offering student loan and college planning assistance, employers can provide retirement contribution matching to help employees make progress toward their retirement savings goals. And employer-based financial wellness programs can offer ongoing assistance and support to help employees stay on track financially.
Financially strong employees boosts the bottom line
When employers work to help their employees meet financial goals, their efforts also boost the business bottom line. That’s because improved finances can translate into improved mental and physical health. When they are not stressed about finances, employees are more productive and miss fewer days of work, according to a study by the Defined Contribution Institutional Investment Association. Because they’re at work and more engaged, financially secure employees can be more productive and do a better job for their employers.
Not only do employers get more productivity when they offer financial wellness and financial education benefits, but they also save money on recruiting and training new employees. That’s because their current employees feel more engaged and loyal, resulting in lower turnover and longer tenures. For example, 81 percent of millennials and 75 percent of gen Xers said they are more likely to be attracted to another company that cares more about their financial well-being, according to the PwC study.
Rather than watching financially stressed employees leave for greener pastures, smart employers take notice and provide those employees with the tools, resources and confidence to turn their financial lives around.
The E*TRADE Financial family of companies provides financial services, including trading, investing, banking, and managing employee stock and financial wellness benefit plans.
E*TRADE Financial Corporate Services, Inc. recently acquired Gradifi, Inc. Gradifi offers financial wellness benefits focused on solutions for employers to provide their employees student loan and college savings benefits.
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