Observing that most employers agree that personal financial issues affect the job performance of their employees, a report published by the International Foundation of Employee Benefit Plans advised employers to counter the detrimental effects of these money worries on productivity by offering their workers access to a range of financial education programs.
The findings of the report, released on March 28, are based in part on the results of a survey conducted in January 2016 among 406 employers in the U.S. and Canada. The survey found that 96% of the employers polled believe that employees’ personal financial issues have some sort of impact on their overall job performance.
Two-thirds (66.3%) of the organizations polled said they provide financial education to employees, with one-third of those employers reporting that they had started providing education in the past five years. Of the employers who offer a financial education program, 61% reported that their employees have become more financially savvy, and 71% said that their employees have become better prepared for retirement since the programs were implemented.
Of the respondents providing financial education, two-thirds (67.3%) said they believe their programs/initiatives have been somewhat or very successful, while the remainder rated their programs as relatively unsuccessful. The results suggest, however, that the benefits of financial education can take a few years to emerge: of the employers with successful programs, 23.8% said the program had been in place for six to 10 years, and 49.2% said the program had been in place for more than 10 years; while the corresponding figures for employers with unsuccessful programs were 11.4% and 42%.
It also appears that executive support is an important factor in the success of financial education programs: when asked about their biggest obstacles to offering financial education, half (50%) of the employers with unsuccessful programs, but only one-quarter (25.4%) of those with successful programs, cited a lack of leadership support.
The report noted that customization is another important component of successful financial education programs. For example, the survey showed that the successful employers were more likely than the unsuccessful employers to have assessed which financial education topics are most needed (29.3% vs. 0%), to have a budget devoted to financial education (27.1% vs. 5.7%), to have customized education for specific groups (32.6% vs. 13.6%), to provide education to retirees (28.2% vs. 12.5%), and to provide education to spouses (45.3% vs. 28.4%)
Similarly, successful employers were more prone than unsuccessful employers to report that they had customized education for specific groups based on age or income level (33% vs. 14%), and that they had targeted education by life stage (12% vs. 2%).
In addition, the survey indicated that the employers with successful programs were more likely than those with unsuccessful programs to offer education using a wide variety of formats, including free personal consultation services (61.9% vs. 36.4%), voluntary classes and workshops (91.2% vs. 68.2%), and web-based online resources and courses (63.5% vs. 40.9%). Finally, the results showed that the successful employers were more likely than their unsuccessful counterparts to use plan record-keepers or administrators (60.2% vs. 45.5%) and financial planners (30.4% vs. 15.9%) for education.
From Benefit Trends Newsletter, Volume 60, Issue 5
The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.