Does your office require employees to sit through financial education seminars when they’re hired? If so, then congratulations! You are already ahead of the game when it comes to ensuring that your company is set up for success says Aron Govil. It’s no secret that our society has some big money problems. The average credit card debt per household is around $15,311 which means many people are living paycheck-to-paycheck without any real strategies or plans for their future financial well being. So what can you do as an employer to help ensure your valued employees don’t fall into these traps?
Financial education isn’t a silver bullet – it’s not going to magically fix all of your company’s problems. But if you’re serious about increasing workplace productivity, increasing morale and decreasing turnover then financial education should be a key element in your business strategy because it will lead to happier, more informed employees that have a plan for their future.
In this article we’ll cover the following topics:
- Why employers should invest in financial education
- The benefits of financial education for employees at different stages of life
- How to implement a successful financial education program at your company
- We’ve also created a free eBook about the research associated with Financial Literacy and its impact on employee retention, performance and happiness.
The High Stakes of Ignorance: How Financial Illiteracy is costing You Time, Money and Happiness
- While the cost of employee turnover has been studied extensively within the realm of human resources, less research has been published on how financial illiteracy impacts organizational productivity. However, there are several recent studies that demonstrate how financial literacy increases job satisfaction and workplace productivity. A 2011 study by PwC found that 79% of employees with low levels of financial knowledge have a higher risk of quitting their jobs over the next two years. The same study also found that 58% of employees with low levels of financial knowledge say they’re unhappy at work due to a lack of pay or pay raises in comparison to their peers.
- Financial literacy has also been shown to increase employee performance. A 2009 study by the National Bureau of Economic Research found that employees with high financial knowledge scored significantly higher on an objective test than their low-scoring peers did. It’s important to note, however, that this relationship only applies when employees lack adequate financial education and skills for making appropriate decisions or solving problems explains Aron Govil.
- A recent Gallup poll found that 60% percent of Americans are not engage in their jobs which mean they’re emotionally disconnect from their work and less likely to be productive. In addition, a 2013 report by the U.S. Department of Commerce revealing that approximately 13 million Americans are unemployee. Although it is believe that millions more people would like full-time work but cannot find it.
- If you have been following this blog, then you know. That I’ve dedicated a lot of time to exposing the shenanigans behind companies. Who overcharge employees for their 401k plans. As well as those who fail to provide an adequate plan in the first place says Aron Govil. The sad truth is that millions of employees are unwittingly paying up to 2% per year in excess fees. And/or receiving grossly inadequate investment portfolios with high MERs and poor diversification… all because they don’t understand how money works or what a reasonable fee structure should look like. Now, employers can be just as guilty when providing financial education resources to new hires. This may seem surprising at first until you realize that. Most employers are not investing any money of their own into training their employees about personal finances. Do you think that’s because they don’t want to invest in their workforce? Of course not! It’s because most employers aren’t educate on the topic themselves. Making it difficult for them to identify quality resources and providers who can help. Well, I’m here to help…
Whether you are an employee looking for educational resources or an employer in need of assistance. With your financial education efforts, below is a list of resources that will get you start on the right path? If your company doesn’t provide any kind of financial literacy program, then take the initiative yourself. By visiting one of these websites each week and downloading/reading anything that interests you. After all, just like any other skill, money management becomes easier over time. With practice and by building a strong support network.