The bad news is that 96% of employers in a recent survey reported that personal financial issues affect their employees’ overall job performance. The good news is that workplace financial education programs can help minimize the negative effects of financial distress, according to the report.
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However, not all financial education programs are created equally. So how do you help ensure the success of your program? Consider three key success factors from the International Foundation of Employee Benefit Plans’ A Closer Look: What’s Working in Workplace Financial Education survey report.
The first key factor is leadership support. Only one-quarter of surveyed employers with successful programs pointed to a lack of leadership support as a major obstacle to offering financial education, compared to one-half of those with unsuccessful programs.
The second factor is longevity. “‘Good things come with time’ holds true for many things, including financial education programs,” said Julie Stich, CEBS, Associate Vice President of Content at the International Foundation. “A program is likely to be more successful the longer it is in place and, according to the report, it takes more than 5 years to be reported as successful.”
Customization is the third factor. Close to 30% of employers who have successful financial education programs have conducted a survey to assess (1) employees’ financial well-being and (2) which financial topics would benefit them most. Among employers with unsuccessful programs, none has done such an assessment.
In addition, employers with successful programs are more likely to customize their financial education offerings by age or income level (33% of employers with successful programs compared to 14% of employers with unsuccessful programs) and target education by life stage (12% compared to 2%, respectively). Organizations with successful programs also tend to use multiple formats to provide financial education. Those formats include free personal consultation services, classes and workshops, Web-based online resources, workbooks, and calculators.
Employers who invest in—and offer—successful workplace financial education programs reap many benefits, Stich explained. “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.”
The survey report also noted that in workplaces where a financial education program is offered, 61% of employers indicate that their employees are more financially savvy, and 71% believe that their employees are more prepared for retirement.
To download the report, click here.